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JPMorgan steps in as MEIF2, Capstone exit heating firm

The pair have sold their respective stakes in Sweden’s Värmevärden following their initial investment in 2011.

JP Morgan Asset Management has bought Swedish district heating company Värmevärden from Macquarie Group and Capstone Infrastructure in a deal believed to be close to about €350 million.

The transaction will give JPMorgan access to Värmevärden’s 600km district heating grid and 639MW of heat generation facilities powered by both oil and biomass in central Sweden.

Capstone said it has received approximately $140 million for its 33.3 percent share in the company and Infrastructure Investor understands that Macquarie reaped a little over €200 million for the remainder of the business.

The deal is believed to have delivered Macquarie a 2.3x money multiple on its investment, which was made through the €4.6 billion Macquarie European Infrastructure Fund 2. The vehicle is in the midst of divesting assets as it nears the end of its lifespan, which could entail the £5 billion ($6.3 billion; €5.8 billion) sale of British telecoms firm Arqiva, in which MEIF2 is a 25 percent shareholder.

Macquarie declined to comment.

The duo acquired Värmevärden in March 2011 from Finnish utility Fortum. It was the last deal completed by Macquarie Power and Infrastructure Corporation before it became known two weeks later as Capstone Infrastructure and began trading on the Toronto Stock Exchange. At the time, Capstone had invested $109 million in Värmevärden.

The firm said the sale of the Swedish company will allow it to refocus on being a pure-play independent power producer in North America. It has a portfolio of 505MW of gas-fired, wind, hydro, solar and biomass power facilities, with a further 19MW under development.