Varmevarden agrees to pay 23x for heating network

22 October 2019 - 12:00 am UTC

JP Morgan’s Swedish district heating business Varmevarden has agreed to buy a majority stake in a Swedish municipal network in a deal valuing it at around 23 times EBITDA.

Varmevarden announced last week that it is buying a 51% stake in the district heating network in the municipalities of Rattvik and Leksand in central Sweden from its current owners Dala Energi and Rattvik municipality. The deal is still subject to political approval, with Rattvik city council and the Dala board set to make a final decision on the sale early next month. 

The Rattvik and Leksand municipalities partly own Dala Energi which is an electricity, heating and telecoms group.

Varmevarden did not disclose a price for the deal, but documents on the Rattvik city website show that the Varmevarden offer gave the whole network an enterprise value of SEK 500m. A source close the situation said that the combined EBITDA of the operations in 2018 was SEK 21.5m.

Varmevarden declined to comment on the price.

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