Consortium forms for Elenia district heating bid

29 March 2019 - 12:00 am UTC

A consortium of Swedish infrastructure investor Infranode together with France’s Mirova and AXA IM has formed to bid for Finnish energy company Elenia’s district heating business, people following the process said. 

The consortium has appointed Macquarie Capital to advise on its bid, the sources added. 

Elenia earlier this year appointed DC Advisory and Danske Bank to advise on the sale of the unit, which is Finland’s second biggest district heating business after Fortum’s. Teasers were issued earlier this month, with IMs likely to come out next month, people following the process said.

Elenia is owned by Allianz Capital Partners (45%), Macquarie Super Core Infrastructure Fund (45%) and the Finnish state pension fund VER (10%).

Elenia’s district heating business’s adjusted EBITDA for 2018 was EUR 26m on revenue of EUR 79m, broadly in line with previous years. The sale multiple is likely to be in the region of recent district heating deals in the region, including the almost 19x EV/EBITDA multiple JP Morgan paid for Swedish district heating business Varmevarden in 2017, sources said.

Among more recent deals, Aberdeen Standard Investments earlier this month closed its acquisition of a 49% stake in a municipal Finnish district heating and gas network in Riihimäki for EUR 51m around 25 times 2018 EBITDA.

Infranode and Mirova have already co-invested in a Scandinavian district heating business, having last year combined with Norwegian insurance company Kommunal Landspensjonskasse to acquire Oslofjord Varme in Norway. 

AXA IM does not have any district heating investments, but energy is one of three main infrastructure sectors it is targeting, along with telecoms and transport

Other investors to have targeted northeast European district heating recently include Whitehelm, which last year bought a 49% stake in Norwegian district heating company Kvitebjorn Varme, and First State, which bought an 85% stake in Estonia’s OÜ Utilitas earlier this year.

Elenia operates in 10 municipalities from central to southern Finland and has around 85,000 users. The city of Hämeenlinna accounts for more than half of revenue.

Infranode, Mirova and AXA IM did not immediately respond to requests for comment. 


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