Antin Infrastructure Partners has agreed to acquire Veolia‘s U.S. district energy business. The enterprise value of the deal is $1.25 billion.
July 31, 2019 – Antin Infrastructure Partners (“Antin”), a leading independent private equity firm focused on infrastructure investments, and Veolia Environnement (“Veolia”), announced today that they have signed an agreement whereby Antin will acquire Veolia’s US district energy business (“the Company”), for an enterprise value of $1.25 billion.
The Company is the largest district energy provider in the United States. The business comprises 13 district heating/cooling systems across ten cities, including strategic positions in Boston/Cambridge, Philadelphia and Baltimore (c.80% revenues). It supplies a wide range of customers including commercial premises, government, universities, hospitals, hotels and manufacturing facilities. Many of its key customer relationships date back to pre-1960. With a nationwide footprint, the Company employs more than 400 people and is expected to generate revenues of approximately $400 million in 2019.
Following the completion of the acquisition (which remains subject to regulatory approvals), Antin will work with the Company’s management team to support the numerous growth opportunities identified. These include optimization and efficiency projects along with growth projects including network densification, midscale project development in existing and new areas, energy services and acquisitions. Positive long-term trends stand to benefit the Company, with urbanization, energy regulation and technological developments all likely to favor district energy over other forms of heating and cooling infrastructure.
This is Antin’s second major investment in the district energy sector after its 2018 acquisition of Idex, a French integrated operator of energy infrastructure assets, operating 41 district heating and cooling networks (including the Paris La Défense network), 13 energy-from-waste facilities and a large portfolio of energy services contracts for a wide variety of counterparties. Antin also has extensive experience in corporate carve-outs, having extracted FPS Towers from Bouygues Telecom in France, Kellas Midstream from BP and BG (now Shell) in the UK, Grandi Stazioni Retail from Ferrovie dello Stato in Italy and Ufinet Spain (now known as Lyntia) from the Ufinet Group.
Alain Rauscher, CEO & Managing Partner at Antin, stated: “This transaction will be recognized as a classic Antin deal by our investors. We have leveraged our European network to secure an excellent platform business in the US, operating in a field where we have strong experience through our investment in Idex (district energy in France) and a strong track record of creating value in the wider energy sector.”
Kevin Genieser, Senior Partner at Antin who led the transaction, added: “This is exactly the sort of transaction that we had in mind when we decided to expand our footprint to the US. Having identified this opportunity over a year ago, we have already built a strong relationship with the management team and we look forward to partnering with them to capture the multiple organic and inorganic growth opportunities that exist for the Company as a standalone business.”
Antin was advised by RBC, Messier Maris & Associés and Ph Villin Conseil (financial advisers) and White & Case (legal adviser).