Funding details revealed for Veolia district heating deal

02 August 2019 - 12:00 am UTC

Antin Infrastructure Partners is going to fund its USD 1.25bn buyout of Veolia’s US energy district business with a combination of equity and debt, said Antin senior partner Kevin Genieser in an interview with Inframation.

 

The deal is expected to close in 4Q19.

 

The auction was described as a very competitive auction, said two sources familiar with the situation.

 

Antin acquired the assets at over 14.2x enterprise value based on forecasted 2019 EBITDA, according to Veolia’s 1H19 earnings release on 1 August.

 

The portfolio of assets is unencumbered by debt.

 

The transaction was the Paris-based fund’s second buyout in the US, but it had familiarity with the business through its stewardship of French-based district hearing firm IDEX Energy, which Antin acquired in the spring of 2018.

 

The buyout checked all the boxes for Antin in terms of being a “strong mission critical operation, carrying robust barriers-to-entry, stability of cash flow and contracts with blue chip clients,” said Genieser.

 

The US business is comprised of 13 district heating and cooling systems across 10 cities including strategic positions in Boston, Cambridge, Philadelphia and Baltimore. Veolia Environment’s North America division will continue to operate the business once the deal closes.

 

Antin said the growth story will come from a number of optimization initiatives and the opportunity to add additional customers. Geineser cited the university space, active lately in procuring new energy projects, could be attractive for potential M&A opportunities.

 

As reported, Dartmouth College is in the midst of procuring for a new district heating plant and distribution system in a process that is expected to conclude next spring.

 

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