Tabreed's Strategic Acquisition in Abu Dhabi
Tabreed and CVC DIF announce a major acquisition of PAL Cooling, a move set to expand their reach in Abu Dhabi's district cooling market.
Summary
Tabreed and CVC DIF acquire PAL Cooling from Multiply Group, enhancing their district cooling capabilities in Abu Dhabi with significant growth potential.
In a significant move that underscores its strategic ambitions, National Central Cooling Company PJSC, better known as Tabreed, has joined forces with CVC DIF to acquire PAL Cooling Holding from Multiply Group. This acquisition, valued at approximately AED 3.8 billion, marks a pivotal step for Tabreed as it seeks to expand its footprint in the district cooling market of Abu Dhabi.
The acquisition includes eight long-term concessions serviced by five state-of-the-art district cooling plants. These plants, strategically located on Abu Dhabi's main island and Al Reem Island, offer a connected capacity of 182,000 refrigeration tons (RT) as of December 2024. The future looks promising, with an expected operational connected load of approximately 600,000 RT, as additional plants are either under construction or in the planning phase.
PAL Cooling, founded in 2006, has established itself as a formidable player in the UAE's district cooling sector. It caters to landmark residential, commercial, and mixed-use developments and has long-term concession agreements with leading developers like Aldar Properties, Modon, and Imkan.
Dr. Bakheet Al Katheeri, Chairman of Tabreed, expressed his enthusiasm, stating, 'Tabreed is always looking to the future and ensuring we remain agile. The acquisition of PAL Cooling with CVC DIF aligns perfectly with our strategic objectives and readiness to adapt to Abu Dhabi's ambitious real estate projects.'
This acquisition aligns with Tabreed's ongoing efforts to meet the UAE's rising demand for sustainable cooling solutions, driven by population growth and decarbonization targets. With the UAE's real estate sector poised for growth, particularly in strategic areas like Al Reem Island, Tabreed's enhanced capabilities position it well to capitalize on these opportunities.
For investors, this acquisition signals Tabreed's commitment to growth and sustainability. The company's strategic partnerships and expansion plans could potentially lead to increased market share and revenue streams. However, as with any investment, potential risks and market dynamics should be considered. Given the current trajectory and strategic positioning, a hold recommendation is suggested, allowing investors to monitor the integration of PAL Cooling and the realization of projected growth.
Source
Summary
Tabreed and CVC DIF have partnered to acquire PAL Cooling Holding from Multiply Group for approximately AED 3.8 billion. The acquisition includes eight long-term concessions serviced by five district cooling plants in Abu Dhabi, with significant growth potential to reach an operational connected load of around 600,000 refrigeration tons. PAL Cooling, established in 2006, is a key player in the UAE district cooling market, with partnerships with major developers like Aldar Properties. The acquisition aligns with Tabreed's strategic goals to support Abu Dhabi's real estate projects and meet the increasing demand for sustainable cooling. CVC DIF highlighted PAL Cooling's long-term contracts in a rapidly growing urban environment. The deal is pending regulatory approvals.
