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Saturday, January 8, 2011

Nashua mayor backs consultant to run water company on interim basis

NASHUA – The mayor has recommended a financial consultant to be the interim chief executive officer of Pennichuck Corp., even though the city’s purchase of the company isn’t expected to be a done deal for at least eight months.

Mayor Donnalee Lozeau recommended John Patenaude for the position to the Board of Aldermen. As with all mayoral appointments, the aldermen must vote to confirm Patenaude.

The appointment wouldn’t be effective until the city owns the company, Lozeau noted in a letter sent to the board on Friday.

“However, it is important for this decision to be made at this time in order to present an orderly plan of transition for approval by the Public Utilities Commission,” Lozeau wrote.

As state regulators, the PUC must approve the $200 million purchase and the city’s plans for how the company would be operated.

Under the agreement the city struck with Pennichuck, the city would name an independent board of directors consisting of seven to 13 members to run the company. The directors would be recommended by the mayor and confirmed by the Board of Aldermen.

Five members would be from Nashua, and the others would be from towns that the water utility serves.

While the company would have new top management, other Pennichuck employees would retain their jobs.

“The main focus of the interim CEO is to ensure a successful transition period at Pennichuck following the change in ownership,” Lozeau wrote. “This role is very different from that of the permanent CEO.”

The interim CEO would serve from one to three years, would help recruit and groom his successor and would have experience with transitioning ownership of a company, among other skills and responsibilities, Lozeau wrote.

“John is only interested in the interim CEO position,” Lozeau wrote. “As a result, he is prepared to accept a compensation package that gives the city complete flexibility when a suitable replacement is available.

“Almost any qualified candidate we find for interim CEO will require a signing bonus, relocation reimbursement and a severance package. John has not asked for any of those incentives.

For the last six months, Patenaude served as a financial consultant to the city as it negotiated the stock purchase of Pennichuck Corp. Lozeau noted that he has 20 years of senior management experience.

Patenaude most recently served as the chief financial officer of Nashua Corp. He was responsible for management of the company’s financial operations and, according to Lozeau, played a key role in the company’s acquisitions and divestitures.

“John has deep expertise in merger and acquisition transition issues from both an operating and a financial management perspective,” Lozeau wrote. “He worked directly with the board of directors of Nashua Corporation and with senior management. He has the training, judgment, experience and interpersonal skills necessary to manage Pennichuck.”

A Hudson resident, Patenaude has been working as a consultant since leaving Nashua Corp. in 2009 after 18 years with the company, which manufactures imaging products.

Patrick Meighan can be reached at 594-6518 or pmeighan@nashuatelegraph.com.