Empower acquires Palm Utilities in $500m deal
The acquisition will be funded through a combination of internal accruals, equity and debt ?financing.
Empower on Sunday announced that it acquired Palm Utilities, including its district cooling service entity Palm District Cooling (PDC), from Istithmar World in what is considered to be one of the largest ever acquisitions in the district cooling industry.
Ahmad bin Shafar, chief executive, Empower, and Hamad Buamim, board member of Dubai World, signed the agreement. The acquisition will be funded through a combination of internal accruals, equity and debt ?financing.
Shaikh Ahmed bin Saeed Al Maktoum, President, Dubai Civil Aviation Authority; Chairman of Dubai Airports; Chairman and CEO of Emirates Airline and Chairman of Dubai World; Mohammed Ibrahim Al Shaibani, board member of Dubai World and Director-General of The Ruler’s Court; and Saeed Mohammed Al Tayer, board member and CEO, Dewa and chairman of Empower, attended the event.
“Empower’s acquisition of Palm Utilities and Palm District Cooling is in response to the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to position Dubai as a centre for sustainable development. The new combined entity is also a reflection of Shaikh Mohammed vision to place the UAE at the forefront of industry and business,” said Shaikh Ahmed.
Empower will immediately take over all projects, functions, operations, assets and liabilities of Palm Utilities including Palm District Cooling which was previously owned and operated by Istithmar World. “This deal is extremely important for Dubai because it sheds light on an emerging industry that offers many investment opportunities. It has also led to the establishment of the largest district cooling provider in the world which highlights the strength of industries in Dubai and the promising opportunities that it offers,” said Mohammed Shaibani. Saeed Mohammed Al Tayer said this deal emphasises the importance of establishing sustainable communities across the emirate and it is in line with Dubai’s vision to become one of the world’s most sustainable cities and a role model for energy efficiency.
“Through this acquisition, we aim to enhance energy efficiency and meet the growing demand for district cooling services in response to Dubai’s increasing economic development, having won the bid to host Expo 2020.”
Ahmad Bin Shafar said Empower’s acquisition of Palm Utilities and PDC, which is worth about $500 million is an important step towards enhancing our strategy which aims to support Green Economy for Sustainable Development.
“This deal will position Empower as the leader in district cooling on a regional and international level. It will also increase the company’s market share in the UAE to about 70 per cent, in addition to increasing its capacity to around one million Refrigeration Tonnes (RT) and therefore the company becomes the largest district cooling provider in the world from a capacity perspective,” Bin Shafar added.
He said this step is considered an important achievement in Empower’s journey and complements the company’s current business and expansion strategy. It will also serve to develop sustainable energy practices in the Emirate which will reflect positively on the development of this vital sector and therefore guarantee the availability of efficient district cooling services in Dubai.
Palm Utilities currently provides its services to various landmark developments including Palm Jumeirah, Jumeirah Lakes Towers, Jumeirah Village, Discovery Gardens, Dubai Multi Commodities Centre and Ibn Battuta shopping mall