Leading Proxy Advisory Firms, ISS And PROXY Governance, Recommend SouthWest Water Company Stockholders Vote 'FOR' Proposed Merger

SouthWest Water Company (NASDAQ:SWWC) today announced that leading independent proxy advisory firms, PROXY Governance and RiskMetrics Group's ISS Proxy Advisory Services ("ISS"), recommend that SouthWest Water's stockholders vote "FOR" the proposed merger in which institutional investors advised by J.P. Morgan Asset Management and Water Asset Management L.L.C. would acquire the company. The adoption of the merger agreement is one of the matters to be voted upon at the Company's upcoming 2010 Annual Meeting of Stockholders on August 6, 2010.

PROXY Governance recommended that SouthWest Water stockholders vote "FOR" the transaction in its July 14, 2010 report by stating: “We support this transaction because it appears to place a fair value on the company based on the overall market reaction, the premium offered, analysts’ opinions and the company’s historic prices. We also support the board’s active engagement in the process, as well as the use of an auction process to help maximize shareholder value.”*

ISS also stated in its July 15, 2010 report, “A vote 'FOR' this proposal is warranted given the thorough strategic review process including appointment of a Special Committee of the board, and the significant merger premium.”*

Mark Swatek, SouthWest Water's president and chief executive officer, said, "Both recommendations from PROXY Governance and ISS support our belief that this proposed transaction is in the best interest to our stockholders, as well as our customers, employees and the communities we serve. We look forward to completing this transaction and urge SouthWest Water stockholders to follow PROXY Governance and ISS’ recommendation by voting 'FOR' the merger at the upcoming Stockholders Meeting."

As previously announced on March 3, 2010, SouthWest Water stockholders will receive $11.00 per share in cash, which represents a 56% premium over the company's closing price on March 2, 2010. After taking into account the company’s outstanding debt, the transaction represents a total enterprise value of approximately $427 million.