Tabreed Expands with Major Acquisitions
Tabreed strengthens its market position with two significant transactions, marking a new era of growth and expansion.
Summary
Tabreed has completed two major transactions, acquiring PAL Cooling and securing a concession for Palm Jebel Ali, boosting its operational capacity and long-term growth.
National Central Cooling Co. (Tabreed), a leading district cooling company in the United Arab Emirates, has announced the completion of two transformative transactions that are set to significantly bolster its growth and enhance its long-term earnings visibility. These strategic moves include the acquisition of PAL Cooling Holding and a landmark concession agreement with Dubai Holding Investments for Palm Jebel Ali.
The acquisition of PAL Cooling, valued at AED 3.87 billion, is a monumental step for Tabreed, as it adds approximately 600,000 refrigeration tons (RT) to its connected capacity. This acquisition encompasses eight exclusive concessions on Abu Dhabi's main island and Al Reem Island, which is now part of the ADGM free zone. The portfolio is supported by five operational plants, with further expansion plans underway.
In addition to the PAL Cooling acquisition, Tabreed has secured a concession agreement with Dubai Holding Investments to provide district cooling services to Palm Jebel Ali, one of Dubai's most iconic developments. This strategic expansion is set to boost Tabreed's operational capacity and diversify its concession portfolio, enhancing long-term cash flow visibility.
These transactions not only increase Tabreed's pro forma connected capacity by 13% to 1.55 million RT but also introduce long-term contracts averaging 25 years with high-quality offtakers such as Aldar, Modon, and Imkan. This positions Tabreed as a formidable player in the district cooling sector, with a strong focus on sustainable and environmentally-friendly solutions.
Given Tabreed's strategic acquisitions and its robust growth trajectory, investors may find this an opportune moment to consider buying shares in the company. The expansion into new territories and the strengthening of its concession-backed business model are likely to yield positive returns in the long term.
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Summary
Tabreed has completed two major transactions, enhancing its growth and long-term earnings potential. The company acquired PAL Cooling, which is expected to increase its connected capacity by 13% with an additional 600,000 refrigeration tons (RT). This acquisition involves eight exclusive concessions on Abu Dhabi's main island and Al Reem Island. Tabreed also finalized a concession agreement with Dubai Holding Investments to provide district cooling services to Palm Jebel Ali, marking its expansion into a significant development in Dubai. These actions are part of Tabreed's strategy to expand its operational capacity, diversify its concession portfolio, and improve long-term cash flow visibility.
