A photo caption in Monday's Washington Business reversed the identifications of Ray Augst and Otis Pool, co-owners of A&P Water and Sewer Supplies. (Published 9/26/90)

It was a classic case of an offer that could not be refused.

After building A&P Water and Sewer Supplies Inc. into the largest distributor of pipes, hydrants, meters and other water and sewer equipment in the Washington area, Ray Augst and Otis Pool decided to sell the Fairfax-based firm to Eastern Enterprises, a Massachusetts company with annual revenue of $1 billion, for undisclosed terms.

"It's really traumatic," Ray Augst said of his decision to sell the 19-year-old firm, which has branches in several states. "But they made us a hell of an offer -- a very fat offer and they're happy with it and we're happy with it," said the 53-year-old Augst.

His partner, Pool, said that although he feels sentimental about the company, "I have no regrets" about selling.

The company to which they sold A&P owns the biggest barge transportation company in the country and New England's largest natural gas distributor, and Augst said its acquisition of A&P is part of a move in a new strategic direction. "{Eastern} had identified the waterworks industry as an industry it wants to expand in," he said.

"We think it's good to enhance our position in the marketplace and when we combine with the other waterworks distributors of Eastern, it will make us number one in the industry," Pool said.

Augst said he and Pool will stay with the merged company and manage it initially. All of the firm's 375 employees are expected to keep their jobs, Augst said, but layoffs are possible. "Anything is possible."

Eastern and A&P are to finalize the purchase agreement at the end of the year. Eastern will acquire much of the 35-branch network of A&P, which does business in Maryland, Virginia, North and South Carolina, Georgia, Florida, Louisiana and Texas.

Ron Ziamba, Eastern's vice president for corporate affairs, said the Massachusetts company will buy most of the 35 branches of A&P -- he declined to give the exact number -- to build a national water products distribution network for its Water Products Co. subsidiary.

"We're buying basically the branch operations of A&P which will fit geographically with our existing operations," Ziamba said. "We decided to acquire A&P because it's very close in terms of customers, product lines and in terms of organizational structures to existing operations at Water Products."

"A&P's position in the marketplace serves very well the Washington and Mid-Atlantic area," Ziamba said. He also declined to disclose the purchase price, citing acquisition talks outside the Washington area.

David E. Dise, purchasing manager of the Fairfax County Water Authority, one of A&P's customers for more than 15 years, noted its competitive strength in its field, and expressed surprise at its decision to accept the bid.

"Our biggest concern is whether the management structure regarding marketing, strategy and customer relations will change. We have been assured by A&P that ... the change will be transparent -- we will not notice it," Dise said.

A&P sells 80 percent of its products to private contractors and 20 percent to municipalities.

Its purchaser, Eastern Enterprises, is a holding company for three businesses that entered the water business only last year through the acquisition of Water Products Co. and Ionpure Technologies Corp.

Both subsidiaries sell water systems components and purification equipment to municipal, commercial and industrial customers. Water Products distributes primarily in the Midwest. Ionpure is a nationwide distributor with some international operations.

Eastern Enterprises also owns Boston Gas Co., New England's largest distributor of natural gas, and Midland Enterprises Inc., the nation's largest barge transportation firm.