On Friday, France’s Vauban Infrastructure Partners, an affiliate of Natixis Investment Managers that is dedicated to equity investments in core, sustainable infrastructure, announced that it is entering the U.S. district energy market, by acquire a stake in DB Energy Assets (DBEA) and Beacon Energy Holdings (a.k.a. Detroit Thermal), which collectively own eight district cooling and heating systems across the U.S. Northeast and Michigan. The sellers are Basalt Infrastructure Partners and DCO Energy.
The portfolio of district cooling and heating systems is diversified by location, technology and customers, with operations spanning six states, serving a customer base including universities, urban centers, hospitals, and commercial and industrial customers.
Following the completion of the acquisition, Vauban will partner with DCO Energy, which 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.
In a statement announcing the deal, Vauban said the acquisition will expand its global footprint to the United States and demonstrate its strong commitment to sustainability, while building upon its significant experience owning and managing district energy systems. Vauban’s believes there is an opportunity to substantially expand the portfolio’s customer base while reducing the environmental impact of the facilities over time.
Vauban says the transaction will also leverage its significant experience in the district energy and heating sector, a vertical in which it has actively invested since 2016. Vauban currently holds controlling interests in five assets, totaling around $2.2 billion 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.
“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,” Vauban CEO and Founding Partner Gwenola Chambon said.
“This groundbreaking acquisition in the U.S. district energy market expands our global energy transition and district energy footprint,” added Deputy CEO and Founding Partner Mounir Corm. “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.”
“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,” DCO Energy CEO Gary Fromer said.
To date, Vauban has raised some $7.3 billion from more than 70 investors across six core infrastructure funds spanning 14 different countries. Its funds have invested in approximately 65 assets in mobility, energy transition, social and digital infrastructure across 11 different geographies.
