Israel's Kenon Acquires 25% Stake in US Infrastructure Firm Vicinity

Kenon, an energy and infrastructure company controlled by Idan Ofer, has announced its first-ever acquisition, purchasing a 25% stake in the American infrastructure company Vicinity for $450 million. This deal values Vicinity at $2.92 billion, including debt. Harrison Street, an investment management firm, is co-investing, acquiring a 35% stake. The shares were sold by the French fund Antin, which will retain approximately 40% and is expected to sell its remaining shares later. The buyers will also assume $1.4 billion in Vicinity's existing debt.

Vicinity specializes in providing heating, cooling, and steam to government institutions, hospitals, office towers, and commercial facilities across 12 major U.S. cities, serving over 700 clients in more than 1,000 buildings. The company operates primarily in Boston and Philadelphia, utilizing a network of underground pipes to deliver these services. This infrastructure model, which is independent of power and water outages, offers a distinct advantage in the U.S. market compared to systems reliant on electricity and gas grids. Vicinity's business model allows for significant customer acquisition with minimal additional investment by leveraging existing infrastructure.

Kenon will gain rights in key decision-making processes and secure a board seat at Vicinity. Vicinity's contracts with clients are for 15 years, and the company reported revenues of $611 million in 2025, with an EBITDA of $140 million. Kenon, established in 2015 as a spin-off from Israel Corporation, previously held stakes in companies like ZIM and Tower, which have since been sold. Before this acquisition, Kenon was valued at $10.5 billion, though its stock saw a 6% decline following the announcement. The company had $600 million in cash reserves prior to the deal, a portion of which will fund this transaction and associated expenses.