Global private equity firm CVC Capital Partners, through its infrastructure strategy arm CVC DIF, has partnered with the UAE’s National Central Cooling Company PJSC (Tabreed) to acquire PAL Cooling Holding. This strategic acquisition, valued at approximately 3.8 billion dirhams ($1.03 billion), signifies a growing interest in the Gulf region’s district cooling sector, driven by economic diversification efforts.
Major Acquisition in UAE District Cooling Sector
CVC DIF and Tabreed have officially announced their partnership to acquire PAL Cooling Holding, a district cooling business owned by Abu Dhabi-based Multiply Group. The deal, with an equity value of around 3.8 billion dirhams ($1.03 billion), is currently awaiting customary regulatory approvals. This move underscores the increasing appeal of the Middle East’s infrastructure market to international investors.
Strategic Rationale and Market Trends
The acquisition highlights a broader trend of international buyout groups seeking investment opportunities in the Gulf region. Governments in the area are actively working to diversify their economies away from oil, making sectors like district cooling particularly attractive. District cooling systems offer a more economical and environmentally friendly alternative to traditional air conditioning, a crucial advantage in a region where summer temperatures can exceed 50 degrees Celsius (122 degrees Fahrenheit).
Key Takeaways
- Partnership: CVC DIF (CVC’s infrastructure strategy arm) and Tabreed have formed a partnership.
- Target: The acquisition target is PAL Cooling Holding, a district cooling business.
- Seller: PAL Cooling Holding is currently owned by Multiply Group.
- Valuation: The equity value of the acquisition is approximately 3.8 billion dirhams ($1.03 billion).
- Approvals: The deal is contingent on receiving standard regulatory approvals.
- Market Significance: This acquisition reflects growing international investment interest in the Gulf’s non-oil sectors, particularly in sustainable infrastructure.
Advisory Roles
Several prominent financial and legal advisors facilitated this significant transaction:
- For Multiply Group: Standard Chartered and Clifford Chance provided advisory services.
- For Tabreed and CVC DIF: Citi, Synergy Consulting, and White & Case advised the acquiring parties.
This collaboration between a major private equity firm and a leading regional cooling company is set to reshape the landscape of the UAE’s district cooling industry, promoting sustainable and efficient cooling solutions in a high-demand climate.
