Carlyle Group selling Missoula water system to Canadian company

MISSOULA – The Carlyle Group has agreed to sell the company that owns Missoula’s water supply and distribution system to Canada-based Algonquin Power and Utilities Corp. for $327 million, the companies said Friday.

The proposed deal, which must be approved by regulators, complicates the attempt by Missoula officials to take ownership of the city’s water system, Mountain Water Co. The city filed a condemnation action in April to force the Washington, D.C.,-based private equity firm to sell Mountain Water to it.

Under the new proposal, Algonquin Power’s Liberty Utilities will acquire Park Water Co., which owns Mountain Water, from Carlyle Infrastructure Partners, the firm’s infrastructure investing business. The companies said the deal is expected to close in 2015.

City officials argue theirs is the only major city in Montana that doesn’t own its own their water supply. Missoula is now trying to use eminent domain to force Carlyle to sell Mountain Water after the city’s purchase offers were rejected. A trial has been set for March.