Pennsylvania American Water announced Thursday it will buy the water system in Steelton, Pa. for $22.5 million, the latest municipal utility to sell itself to private owners under a 2016 law encouraging the privatization of water systems.

The company, a subsidiary of American Water Works Co. Inc. of Voorhees, N.J., will acquire the water assets of the Steelton Borough Authority in Dauphin County, which serves nearly 2,400 customers. The authority's board approved the sale Wednesday by a 4-1 vote.

The buyers committed to invest about $36 million in improvements to Steelton's water system over the next 10 years. The transaction is set to close in the third quarter of 2019, pending regulatory approvals.

Pennsylvania American and its rival, Aqua Pennsylvania, have been on an acquisition binge recently triggered by a 2016 state law that encourages the consolidation of smaller water and wastewater systems under private ownership.