Blackstone Buys Geosyntec in Wager on Global Energy Transition

Blackstone is buying a majority stake in Geosyntec Consultants, an engineering and consulting firm that shapes waterways, coastlines, dams and power grids.

The world’s largest alternative asset manager is wagering that more companies and states will need hydro-geologists and engineers to navigate climate regulations and understand their impact on the environment. Blackstone’s $380m equity infusion values Geosyntec at more than $750m, according to people familiar with the matter.

Power utilities have tapped Boca Raton, Florida-based Geosyntec to deal with ash from the burning of coal, and the firm also has helped to clean up pollutants in soil and water. The firm is a design engineer for a major Toronto redevelopment project that aims to turn former industrial waterfront properties into a residential community.

Blackstone plans to keep investing in Geosyntec as it continues to expand, and the consulting firm’s top executives are expected to retain minority stakes. It’s part of a longer-term wager by Blackstone to profit as economies shift to alternative energy sources such as wind and solar.

“We’ve been spending quite a bit of time on what businesses will be key enablers in helping the transition take shape,” Darius Sepassi, the Blackstone managing director who led the deal, said in an interview.

Policymakers in Washington are divided over how much and how quickly businesses should reduce investment in oil and gas, especially when rising energy prices have led to widespread pain at the pump. Firms face a thicket of regulations and permitting requirements when building solar and renewable infrastructure.

Blackstone and other private equity firms are betting the shift will endure. Global investment in energy transition rose to a record $755bn last year, according to data compiled by Bloomberg.

Blackstone invested in Geosyntec through an energy fund it launched in 2020 after the firms began discussions late last year.

Geosyntec, with more than 1,700 employees, has grown significantly since its founding in 1983 amid strains from the nation’s aging infrastructure, natural disasters and the need among companies to restore areas where they handle production, Geosyntec Chief Executive Officer Peter Zeeb said in the interview.

“It’s come to exceed our ability to keep up with it organically,” he said.