Aqua America Inc., the nation’s second largest water utility, said Tuesday it would acquire Pittsburgh-based natural gas utility Peoples in an all-cash deal for $4.275 billion, including $1.3 billion of debt.

Bringing aboard Peoples, the fifth largest U.S. standalone gas utility with 740,000 customers in western Pennsylvania, West Virginia and Kentucky, would create the only publicly traded water and gas provider in the United States, said Aqua CEO Christopher Franklin, who is to lead the combined company.

The new entity would operate regulated utilities over a 10-state footprint. Most of the customers are concentrated in Pennsylvania, which would account for more than 77% of the total rate base. Aqua America would remain headquartered in the Philadelphia suburb of Bryn Mawr, while the Peoples subsidiary would remain in Pittsburgh and continue to be led by Morgan O’Brien, who has been a vocal proponent of the city’s ongoing transformation, fueled in part by the cross section of an energy and technology renaissance.

Besides Pennsylvania, Aqua operates water and wastewater utilities in Illinois, Indiana, New Jersey, North Carolina, Ohio, Texas and Virginia. Pennsylvania operations are across most of the state, except for the southwestern corner, an epicenter of gas production where Peoples has a strong presence.

Moreover, under O’Brien, Peoples since last year has been promoting itself as the private sector savior of the beleaguered Pittsburgh Water & Sewer Authority (PWSA), which serves 300,000 customers in parts of the city and surrounding areas.

PWSA is in debt, in need of infrastructure upgrades and has continually faced criticism over service issues. While public officials have said privatization was out of the question, Peoples has pushed for a partnership to help improve the municipal utility.

“Significant growth in rate base and earnings is expected to be driven by pipe replacement capital expenditures, new customer connections and continued success in municipal acquisitions,” Aqua management said of the transaction. “As a larger publicly traded utility, the resulting company will have enhanced ability to access capital and fund its infrastructure and capital expenditure needs.”

A combined Peoples and Aqua would serve 1.74 million customer connections. In 2019, Aqua expects the company would have $10.8 billion in assets and a projected U.S. regulated rate base of more than $7.2 billion. Aqua’s rate base is projected to grow annually at 7%, while Peoples is expected to grow by up to 10% through 2021.

Franklin said the acquisition of Peoples is a “great strategic fit and aligns directly with our growth strategy and core competencies of building and rehabilitating infrastructure, timely regulatory recovery and operational excellence.”

Aqua is acquiring the gas utility from SteelRiver Infrastructure partners, an investment firm that primarily serves insurance funds and pensions. Peoples has grown its customer base to 740,000 from about 360,000 customers over the last decade or so, acquiring Equitable Gas Co., T.W. Phillips Gas & Oil and Delta Natural Gas to expand into West Virginia and Kentucky in that time.

The Aqua transaction must be approved by regulators in Pennsylvania, Kentucky and West Virginia. It is expected to close in mid-2019. Aqua said it would fund the deal with a fully committed bridge facility. Permanent financing is to include a mix of equity and debt. Aqua’s stock fell nearly 8% on Tuesday to close at $35.01/share.