Partners Group Buys District Heating Platform in Northern Europe from Fortum
Posted on 03/13/2021
Partners Group, on behalf of its clients, agreed to acquire one of the largest district heating platforms in the Baltics, from Finnish energy company Fortum Corporation. Fortum, which operates across Estonia, Latvia and Lithuania, has 74 generation assets, which generate heat capacity of 881 MW and power capacity of 130 MW across 387 kilometers of district heating networks. The District Heating Platform’s fuel is largely derived from renewable or recycled sources, mainly biomass.
The total consideration on a debt- and cash-free basis is 800 million euros. Fortum expects to record a tax exempt capital gain of approximately 240 million euros in the City Solutions segment’s second-quarter 2021 results. The transaction is subject to customary closing conditions and is expected to be completed in the second quarter of 2021.
In 2020, Fortum divested the district heating businesses in Joensuu and Järvenpää, in Finland. The strategic reviews of the heating and cooling businesses in Poland, its 50% stake in Stockholm Exergi, and the Consumer Solutions business are currently ongoing. Stockholm Exergi is jointly owned with the City of Stockholm.
On February 25, 2021, Partners Group agreed to acquire Parmaco Oy, a provider of premium quality modular education buildings in the Nordics, on behalf of its clients, from a consortium led by European private equity firms Terra Firma and Metric Capital. Established in 1966 and headquartered in Tampere, Finland, Parmaco designs, builds and leases fully assembled and ready-to-use high quality wooden modular buildings that are used as schools and day care centers in Finland and Sweden. The Platform’s 353 modular buildings, which have a total leasable area of 280,000 square meters, host over 35,000 children, supporting communities across Finland with a growing presence in Sweden. The transaction, resulting from a sales process run by Deutsche Bank, is subject to merger control approval from the Finnish Competition and Consumer Authority and is currently expected to close in Q2 2021.
Parmaco was acquired from Finnish private equity fund MB Funds in 2018 through Terra Firma Special Opportunities Fund IV, in partnership with Metric Capital, the pan-European private capital manager, and Sun Hung Kai & Co Limited, an firm headquartered in Hong Kong.
On February 22, 2021, Partners Group acquired Resilient Infrastructure Group, a water infrastructure platform focused on acquiring, developing, financing and operating distributed water-related facilities in the U.S. and Canada. Resilient is headquartered in Portland, Oregon, and provides distributed water and wastewater solutions to industrial, technology, institutional and municipal clients that solve their site-specific treatment needs. Concurrent with Partners Group’s acquisition of Resilient, the Platform closed an investment in a wastewater-to-renewable natural gas project at Threemile Canyon Farms in Oregon.
Keywords: Fortum Oyj.