Kenon to Acquire 25% Stake in US District Heating and Cooling Business for $450 Million
Kenon Holdings Ltd. has agreed to acquire a 25% interest in Vicinity District Energy, a US-based district heating and cooling business, for approximately $450 million. The acquisition is part of a larger transaction.
SINGAPORE – Kenon Holdings Ltd. announced on September 30, 2026, that it has entered into an agreement to acquire a 25% equity interest in Vicinity District Energy for cash consideration of approximately $450 million. This acquisition is part of a broader transaction where Vicinity's current majority owner, an entity related to Antin Infrastructure Partners, is selling a majority stake to a company owned by Kenon and funds managed by Harrison Street Asset Management (HSAM).
Vicinity operates as a significant district heating and cooling infrastructure utility platform in the United States, serving as the sole provider in 12 major cities, including Boston and Philadelphia. The company supplies steam, hot water, and chilled water to over 700 customers across approximately 1,000 buildings, utilizing over 140 miles of underground pipe infrastructure. Vicinity's revenues are primarily derived from long-term contracts with inflation-linked escalators and fuel cost pass-throughs. The company is also developing decarbonized solutions to support customer sustainability goals.
The transaction values Vicinity at a total enterprise value of $2.92 billion for 100% of the company. Kenon's maximum cash obligation for its interest is approximately $450 million, and the company intends to fund this using existing cash on hand and liquidity.
This investment aligns with Kenon's strategy to maximize shareholder value through substantial investments in established industries and diversifies its business beyond electricity generation. Kenon will receive significant board representation and plans to be actively involved in the growth and development of Vicinity.