In a significant move for the UAE’s infrastructure sector, CVC’s infrastructure strategy arm, CVC DIF, and the UAE’s National Central Cooling Company PJSC (Tabreed) have announced a strategic partnership. This collaboration aims to acquire PAL Cooling Holding, a district cooling business owned by Abu Dhabi-based Multiply Group, for an equity value of approximately 3.8 billion dirhams ($1.03 billion).
A Strategic Acquisition in the UAE
CVC DIF and Tabreed have formalized their partnership to acquire PAL Cooling Holding. This acquisition, valued at roughly $1.03 billion, underscores the growing interest of international investment groups in the Gulf region’s diversifying economies. The deal is currently awaiting customary regulatory approvals.
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.
- Value: The equity value of the acquisition is approximately 3.8 billion dirhams ($1.03 billion).
- Approvals: The deal is subject to standard regulatory approvals.
The Significance of District Cooling
District cooling systems are vital infrastructure in regions with high temperatures, such as the UAE. They provide chilled water through insulated pipes to cool various types of buildings, including offices, industrial facilities, and residential complexes. These systems are considered a more economical and environmentally friendly alternative to traditional air conditioning, especially in areas where summer temperatures can exceed 50 degrees Celsius (122 degrees Fahrenheit).
Advisory Roles in the Deal
The complex transaction involved several prominent financial and legal advisors:
- For Multiply Group:
- Standard Chartered (Financial Advisor)
- Clifford Chance (Legal Advisor)
- For Tabreed and CVC DIF:
- Citi (Financial Advisor)
- Synergy Consulting (Financial Advisor)
- White & Case (Legal Advisor)
Investment Trend in the Gulf
This acquisition highlights a broader trend of international buyout groups increasing their investments in the Gulf region. Governments in these countries are actively working to diversify their economies away from oil dependency, creating attractive opportunities for foreign capital in various sectors, including infrastructure and utilities.
