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Aqua America to Acquire New York Water Service Corporation
Valued at $51 Million


    BRYN MAWR, Pa.--May 16, 2006--Aqua America, Inc. (NYSE: WTR)
announced today that it has reached an agreement with Utilities &
Industries Corp., LLC to acquire New York Water Service Corporation in
a transaction valued at $51 million. Aqua America will pay $28 million
in cash to acquire the stock of the company and assume $23 million in
debt.
    New York Water Service provides public water to approximately
135,000 residents in the well established, populated area of
southeastern Nassau County, Long Island, New York in the communities
of Merrick, North Merrick, Bellmore, North Bellmore, Wantagh, Seaford,
and portions of Levittown and Massapequa.
    "This acquisition expands our New York operation and provides the
critical mass and economic base necessary to become one of the major
water companies in New York and take advantage of other growth
opportunities throughout the state," said Aqua America Chairman
Nicholas DeBenedictis. "We are looking forward to operating on Long
Island and making the capital investments necessary to maintain good
water quality and reliable service for our new customers."
    DeBenedictis added that, "New York Water Service Corporation has a
long history in the water business, an experienced management team and
a professional employee base. As such, this well-run utility has
earned fair treatment from state regulators."
    New York Water Service Corporation President Vincent A. Bohn, Jr.
said, "We are very pleased to know that our employees and customers
will become part of a water utility with a reputation for excellence
and a demonstrated commitment to their core business--water. I am
confident that with more than 100 years in the water business and more
than a decade of extensive experience with buying and integrating
other water and wastewater utilities with their own, Aqua America will
be the perfect owner for our water utility company."
    The acquisition will expand Aqua America's overall customer base
by more than five percent. The New York operation will extend far
beyond the 3,000 residents currently served in the Westchester County
area of the state and become Aqua America's seventh largest state
operation. DeBenedictis added, "This acquisition is a sizeable,
platform-building complement to the steady stream of acquisitions that
comprise our growth-through-acquisition strategy."
    The New York Water acquisition is subject to approval by the New
York Public Service Commission. DeBenedictis said the company
anticipates closing by year-end.
    Aqua America, Inc. is the largest U.S.-based publicly-traded water
utility, serving more than 2.5 million residents in Pennsylvania, New
York, Ohio, North Carolina, Illinois, Texas, Florida, New Jersey,
Indiana, Virginia, Maine, Missouri, and South Carolina. Aqua America
is listed on both the New York and Philadelphia Stock Exchanges under
the ticker symbol WTR.

    This news release contains forward-looking statements. These
forward-looking statements are found in various places throughout this
press release and include, without limitation, statements regarding
the expected timing and benefits of the acquisition, including the
amount and type of consideration to be paid by Aqua America,
anticipated levels of capital spending, opportunities for future
growth, the expected timing of regulatory approval of the transaction,
and the effect of the transaction on Aqua America's earnings. While
these forward-looking statements represent our judgments and future
expectations concerning the development of our business and the timing
and benefits of the acquisition, a number of risks, uncertainties, and
other important factors could cause actual developments and results to
differ materially from our expectations. These factors include, but
are not limited to, regulatory approvals for the transaction; the risk
that the acquired company's business will not be successfully
integrated into Aqua America; the costs related to the transaction;
the inability to obtain or meet conditions imposed for governmental
approvals for the transaction; the risk that anticipated benefits will
not be obtained or will not be obtained within the time anticipated;
and other key factors that we have indicated could adversely affect
our business and financial performance contained in our past and
future filings and reports, including those filed with the Securities
and Exchange Commission. Neither Aqua America nor New York Water
Service Corporation is under any obligation (and each expressly
disclaims any such obligation) to update or alter its forward-looking
statements whether as a result of new information, future events, or
otherwise.