CVC, Tabreed enter partnership to buy UAE district cooling business

United Arab Emirates' Tabreed TABREED and private equity firm CVC's CVC infrastructure strategy arm, CVC DIF, plan to acquire Abu Dhabi-based Multiply Group's MULTIPLY district cooling business, according to a statement on Monday.

CVC DIF and Tabreed have entered into a partnership to acquire PAL Cooling Holding at an equity value of about 3.8 billion dirhams ($1.03 billion), CVC DIF, Tabreed and Multiply Group said in a joint statement.

The deal is subject to customary regulatory approvals.

Multiply Group was advised by Standard Chartered and Clifford Chance, according to the statement, while Tabreed and CVC DIF were advised by Citi, Synergy Consulting and White & Case.

Reuters reported on May 30 that CVC and Tabreed were in exclusive talks to buy PAL Cooling Holding.

The interest in PAL Cooling Holding highlights how international buyout groups are increasingly looking to invest in the Gulf region as governments there strive to diversify their economies from oil.

District cooling plants, which deliver chilled water via insulated pipes to cool offices, industrial and residential buildings, have been developed as a more economical and environmentally friendly alternative to air conditioning.

They are popular in the United Arab Emirates and elsewhere in the Arabian Peninsula, where summer air temperatures can soar above 50 degrees Celsius (122 degrees Fahrenheit).

($1 = 3.6723 UAE dirham)