Veolia Energy North America has identified a buyer for its district energy assets in the U.S., concluding a months-long investment bank-run sale process.

Antin Infrastructure Partners, an infrastructure-focused investment fund, will buy the assets for $1.25 billion.

Antin, which has almost $9 billion in funds under management, opened a New York office earlier this year, appointing senior partner Kevin Genieser to lead it. Genieser had joined the firm in 2017 following a 20-year career at Morgan Stanley, where he was managing director and head of power & utilities in the Emea region.

“We have long-considered this expansion and now is the right time," said Antin's CEO and managing partner, Alain Rauscher, in March when the New York office opened. "New York is the epicenter of North American finance and we wanted to have a local presence on the ground."

The firm already has a track record with district energy investments, having owned Idex, which operates about 40 heating and cooling networks in France, since 2018.

Veolia's District Energy Networks portfolio comprises steam, hot and chilled water and electric generation plants, including cogeneration, and 13 networks in 10 U.S. cities.

The deal is expected to close in the fourth quarter of this year, subject to approvals.

Competitive process

As Veolia's financial adviser, Bank of America Merrill Lynch opened the bidding for District Energy Networks at the end of March, as previously reported by PFR (PFR, 4/10). Mike Dunne, a managing director at BAML, oversaw the auction.

The district energy business was expected to produce $90 million of Ebitda, according to the initial marketing materials. However, Veolia subsequently agreed to buy I Squared Capital Advisors' 49% interest in the 256 MW Kendall Cogeneration Station in Cambridge, Mass., adding it to the 51% stake it already owned (PFR, 5/7).

An investment banker was expecting the business to trade at a multiple of about 12 times Ebitda.

Of 20 or so first round bidders, about five made it to the final round, which concluded with offers being taken on July 19, a project finance banker told PFR (PFR, 5/30).

Macquarie Infrastructure Corp., Algonquin Power & Utilities and Axium Infrastructure were among the suspected final-round bidders, according to an investment banker following the process. Other names floated as likely suspects included Engie, Brookfield Renewable Partners, Enwave and General Electric.

Antin was advised on its winning bid by Royal Bank of Canada as well as French financial advisory boutiques Messier Maris & Associés and PH Villin Conseil, and was represented by law firm White & Case.

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