Harrison Street Asset Management is acquiring a majority stake in Vicinity Energy, the largest owner and operator of district energy systems in the US, from Antin Infrastructure Partners in a deal valuing the business at $2.92bn (€2.61bn).
Harrison Street is executing the deal alongside Kenon Holdings, with Kenon taking a 25% equity interest in Vicinity for a cash consideration of roughly $450m.
Vicinity provides district heating and cooling services across 12 major US cities, serving more than 700 customers across 1,000 buildings via a 140-mile underground pipe network.
Carolyn Arida, partner, infrastructure at Harrison Street, said: “District energy is an important area of focus for Harrison Street’s infrastructure strategy, and we see compelling opportunities to continue investing in these systems essential to meeting the critical utilities needs of the largest university, healthcare and government users.
“Vicinity’s scale, diversified customer base and critical role within the communities and institutions it serves make it a highly attractive addition to our portfolio, and we look forward to working with Vicinity’s leadership team to support the platform’s continued growth and to creating durable, long-term value for our investors.”
Kevin Hagerty, president and chief executive officer of Vicinity, said: “This new partnership with Harrison Street Asset Management creates an opportunity to amplify our momentum through continued investment, innovation and growth, while remaining steadfast in our commitment to operating safely, serving our customers reliably, and supporting the communities that depend on us.”
The disposal marks the first exit for Antin Infrastructure’s Fund IV, seven years after the manager carved out the Boston-headquartered business from Veolia to establish the platform.
Guillaume Friedel, senior partner, and Hamza Fassi-Fehri, partner at Antin, said that Vicinity has developed into one of the most successful standalone district energy platforms in the US during Antin’s ownership. They highlighted the business’s growth and its contribution to the country’s energy transition, particularly through the commercialisation and rollout of eSteam, Vicinity’s proprietary carbon-free thermal energy technology powered by renewable electricity.
“The leadership and vision of the late Bill DiCroce and Kevin Hagerty have been instrumental in Vicinity’s growth, and we are fully confident that Kevin and his talented management team will continue powering the company ahead as it enters its next growth chapter,” they added.
Kevin Hagerty, president and CEO of Vicinity, said: “We are grateful for the dedication of our employees, the trust of our customers and to Antin for its partnership throughout this chapter of our growth. Together, we have built a strong foundation for success.
“This new partnership with Harrison Street Asset Management creates an opportunity to amplify that momentum through continued investment, innovation, and growth, while remaining steadfast in our commitment to operating safely, serving our customers reliably, and supporting the communities that depend on us.”
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