The Canada Pension Plan Investment Board is investing $750 million in Aqua America Inc., the second largest publicly traded water and wastewater utility based in the U.S.

The investment is an important step in Aqua’s efforts to obtain permanent financing for their pending acquisition of Peoples Natural Gas Co., according to a press release, which noted the acquisition will create a new utility infrastructure company positioned to improve infrastructure reliability, quality of life and economic prosperity in the areas it serves.

CPPIB will acquire around 21.7 million newly issued shares of Aqua’s common stock.

“We’re pleased to partner with Aqua America to support the revitalization of this key infrastructure,” said Deborah Orida, senior managing director and global head of active equities at the CPPIB. “By acquiring Peoples, Aqua America will create a unique platform with a strong management team poised for further expansion.”

The all-cash Peoples acquisition reflects an enterprise value of $4.275 billion, including $1.3 billion in debt. The transaction will be financed through a mix of equity and debt.

“CPPIB’s investment in Aqua is an impactful contribution toward closing our acquisition of Peoples,” said Christopher Franklin, Aqua America chairman and chief executive officer. “This investment positions us well as we look ahead to completing permanent financing for the Peoples acquisition, and we appreciate CPPIB’s commitment to this transformational endeavour.”