(Bloomberg) -- National Central Cooling Co. acquired the business that supplies chilled air to buildings on the Saadiyat Island, including Abu Dhabi's Louvre museum and the city's New York University campus.
The Dubai-listed company, also known as Tabreed, said it bought two Saadiyat Island district cooling plants from Aldar Properties PJSC for 963 million dirhams ($262 million). Aldar expects an internal rate of return of more than 40% on its original equity investment and said the transaction will complete in the first quarter.
“Moving forward, we are well placed -- both financially and operationally -- to continue to take advantage of further growth opportunities in the UAE market and beyond,” Tabreed Chief Executive Officer Bader Al Lamki said on Wednesday.
Tabreed shares rose as much as 1.2%, taking its advance this year to 36%. Aldar shares gained as much as 2.5%.
Cash for Growth
Tabreed sold $500 million in bonds in October and raised $692 million in a syndicated loan in September, which could help fund more acquisitions, Al Lamki said in an interview with Bloomberg TV. “Definitely, we still have some cash to continue with our growth ambition.”
The Middle East, where temperatures often soar above 110 degrees Fahrenheit (43 Celsius) during the summer, is the biggest market for district cooling systems and the sector has been consolidating.
Tabreed, whose biggest shareholders are Abu Dhabi's Mubadala Investment Co. and French utility Engie SA, bought an 80% stake in a district cooling facility serving the Dubai Mall and the Burj Khalifa -- the world's tallest building -- from Emaar Properties PJSC earlier this year.
Tabreed may also bid for the chilled-air operations at Dubai's main airport, which the government is seeking to sell in a deal potentially valued at about $750 million. The company is still deciding whether to submit an offer for that business, Al Lamki said in the interview.
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