Vauban Infrastructure Partners (“Vauban”) announced today that on December 30, 2021, it entered into a definitive agreement to acquire the entire stake in DB Energy Assets, LLC (“DBEA”) and Beacon Energy Holdings LLC (“Detroit Thermal”) (together, the “Company”), which collectively own a portfolio of eight district cooling and heating systems across the Northeast and Michigan, from Basalt Infrastructure Partners II LP (“Basalt”) and DCO Energy, LLC (“DCO Energy”).
The Company has an attractive portfolio of district cooling and heating systems diversified by location, technology and customers, alongside an experienced management team that will support the platform, its existing customer base and its long-term growth following closing. The Company currently operates across six states, providing reliable, sustainable, and cost-efficient sources of energy solutions to a diverse customer base including universities, urban centers, hospitals, and commercial and industrial customers.
Under Basalt’s ownership, the Company enhanced its asset base and executed on a number of strategic projects and opportunities. Following the completion of the acquisition, Vauban will partner with DCO Energy who will continue to operate and maintain the facilities under a long-term contract. DCO Energy will also support the Vauban team with its carbon footprint reduction objectives and ongoing investment in the development and expansion of the facilities and asset base. DCO Energy is an industry-leading developer and operator with experience managing the facilities, as it has driven the development and/or acquisition of the facilities in the Northeast and has operated these facilities post-development or acquisition.
This acquisition will expand Vauban’s global footprint to the United States and demonstrates Vauban’s strong commitment to sustainability, while building upon its significant experience owning and managing district energy systems. Vauban’s interest in acquiring the Company and the facilities is also driven by its commitment to support the ongoing operations of the Company and advance the Company’s long-term growth, as it believes there is an opportunity to substantially expand the Company’s customer base while reducing the environmental impact of the facilities over time.
The transaction will leverage Vauban’s significant experience in the district energy and heating sector since 2016. Vauban currently holds controlling interests in five assets, totaling ~USD 2.2bn in enterprise value in Finland, France, Italy, Norway, and Spain. The deal echoes Vauban’s strategy of building long-term relationships with industrial partners. Vauban benefited from the support of its three local Senior Advisors and experts (Leonie Maruani, Steven Klein, and Olivier Ta) with combined experience of over 60 years in the North American infrastructure market.
Gwenola Chambon, CEO and Founding Partner at Vauban Infrastructure Partners comments: “Through this landmark transaction, Vauban Infrastructure Partners enters into the U.S. district energy market. This acquisition will allow Vauban to leverage its considerable experience in the European district energy market and is an important first step for Vauban in building a sustainable, long-term platform in the United States.”
Mounir Corm, Deputy CEO and Founding Partner comments: “This groundbreaking acquisition in the U.S. district energy market expands our global energy transition and district energy footprint. Vauban is delighted to strengthen its presence in district heating networks and to support their development in the United States, through a long-term collaboration with DCO Energy, which is in line with our strategy to build long-term relationships with industrial partners.”
Gary Fromer, Chief Executive Officer at DCO Energy also remarked: “Over the last few years, in partnership with Basalt, we have significantly invested in and scaled our portfolio of district energy assets. We are excited by our new long-term partnership with Vauban Infrastructure Partners, and look forward to continuing to deliver reliable services to the customers, supporting the communities in which we operate, and participating in the continued development of the Company and its facilities.”
David Greenblatt, Head of North America at Basalt said: “Basalt Infrastructure Partners LLC is pleased to have had the opportunity to partner with DCO Energy and the management teams at DBEA and Detroit Thermal. Their steadfast commitment to safely providing sustainable energy across our district energy customer base while executing on organic growth and follow-on acquisitions meaningfully contributed to the success of the business.”
The closing of the transaction is subject to the satisfaction of customary regulatory and other approvals.
Vauban was advised by RBC Capital Markets as a financial advisor and Allen & Overy as legal advisor, as well as KPMG, Arup, PA Consulting Group, Cushman & Wakefield and Aon.
Basalt and DCO Energy were advised by TD Securities as financial advisor and Morgan Lewis & Bockius as legal advisor.
About Vauban Infrastructure Partners
Vauban Infrastructure Partners is a leading Infrastructure Asset Manager focused on the core infrastructure investments. Headquartered in Paris, it employs 56 professionals who have been working together for a decade. Vauban is the fully fledged affiliate of Natixis Investment Managers, dedicated to sustainable infrastructure equity investments. Vauban targets predominantly midmarket infrastructure assets pursuing a long-term yield-driven strategy matching the underlying nature of assets and long-term commitment to all stakeholders’ interests through a strong focus on creating sustainable value. Vauban has raised c. $7.3 billion across 6 funds in core infrastructure from over 70 investors within 14 different countries and has invested in over 65 assets in mobility, energy transition, social & digital infrastructure across 11 different geographies.
About DCO Energy, LLC
DCO Energy, LLC is an independent developer and operator of energy assets, specializing in the development, engineering, construction, start up, commissioning, operation, maintenance and management, as well as, ownership of district energy assets, renewable energy projects and power generation facilities. DCO was formed in 2000 with a core team of energy experts.
About Basalt Infrastructure Partners LLC
Basalt Infrastructure Partners LLC is a leading mid-market infrastructure firm with offices in London and New York focused on equity investments in utilities, power, transport, and digital infrastructure in North America and Europe.