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Aberdeen to Buy Desalination Plant for More Than $1 Billion

Gillian Tan

(Bloomberg) -- An affiliate of Aberdeen Standard Investments has agreed to buy the Carlsbad desalination plant in Southern California for more than $1 billion, according to people with knowledge of the matter.

A transaction could be announced as soon as this week, said one of the people, who asked not to be identified because the matter is private. The Claude “Bud” Lewis Carlsbad Desalination Plant, named for a former mayor, is owned by Orion Water Partners LLC, the joint venture between Stonepeak Infrastructure Partners and Brookfield Infrastructure Partners affiliate Poseidon.

Representatives for Aberdeen, Stonepeak, Poseidon and Brookfield all declined to comment.

The plant removes salt and impurities from seawater. It was developed as a public-private partnership and delivers about 50 million gallons of fresh water per day, enough to serve roughly 400,000 people and about a third of all water generated in fast-growing San Diego County. Its capacity is set to rise to 60 million gallons, following approval from local authorities to construct a standalone pumping station to draw seawater and build a new intake structure that will reduce the number of fish sucked into the plant.

The ownership group signed a 30-year agreement with the San Diego County Water Authority in 2012 and later constructed a 10-mile (16-kilometer) pipeline as well as the plant itself, which opened in 2015 and is the largest in the Western Hemisphere, according to its website.

Infrastructure is generally uncorrelated to other asset classes, and investments are known for providing stable income and a hedge against inflation, according to data provider Preqin. A deal for the plant could help lift second-quarter activity after a relatively slow first quarter, when 508 transactions worth a combined $58 billion were announced. That marked the lowest quarterly level in five years and second-lowest quarterly deal volume on record, Preqin said.

(Adds Aberdeen comment in third paragraph.)

--With assistance from Scott Deveau.

To contact the reporter on this story: Gillian Tan in New York at gtan129@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, Michael J. Moore, Dan Reichl

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