Compressco Partners LP (NASDAQ: GSJK) said July 20 it will purchase all the outstanding shares of Compressor Systems Inc. (CSI) from Warren Equipment Co. for $825 million in cash.
The acquisition should increase Oklahoma City-based Compressco’s total horsepower (hp) offering to more than 1 million from about 187,000, the company said, noting that the acquisition will “allow the partnership to participate in the compression market at a broader level.” This increased participation will be due to the increase of 2,370 hp units from 20 hp units, the company added.
Midland, Texas-based CSI is the country’s largest privately held, full service natural gas compression provider. CSI noted that for the fiscal year ending March 31, it had $311 million in aggregate revenues, and EBITDA was $82.3 million.
The transaction is scheduled to close in early August, the company said.
Additionally, in separate press releases issued July 20, Compressco Partners noted that about 1.53 million common units, and $350 million in aggregate principal amount of senior notes due 2022, were offered to fund part of the acquisition’s purchase price and related expenses.
BofA Merrill Lynch, Barclays Capital Inc., Wells Fargo Securities LLC, J.P. Morgan Securities LLC, Raymond James & Associates Inc., Credit Suisse Securities (USA) LLC and RBC Capital Markets LLC are joint book-running managers for the units offering. BofA Merrill Lynch is also the sole representative for the underwriters, Compressco said in the release about the common units.
There is about $400 million from the common unit offer, the main press release said, and the balance should be drawn from a $400 million revolving credit facility, the release noted.
TETRA Technologies Inc., based in The Woodlands, Texas, which indirectly owns Compressco's general partner, should "purchase common units and make contributions" to keep its general partner interest, the release added.
Recommended Reading
EIA: E&P Dealmaking Activity Soars to $234 Billion in ‘23
2024-03-19 - Oil and gas E&Ps spent a collective $234 billion on corporate M&A and asset acquisitions in 2023, the most in more than a decade, the U.S. Energy Information Administration reported.
Hess Pushes Shareholders to Vote in Favor of $53B Chevron Merger
2024-04-01 - Hess Corp.’s board is unanimously recommending its shareholders vote in favor of the proposed $53 billion all-stock merger with Chevron Corp., according to Chevron’s March 28 Securities and Exchange Commission filing.
Exxon Signals Potential Counter Offer for Hess’ Guyana Assets
2024-03-07 - Exxon Mobil has filed a contract arbitration claim related to Chevron’s proposed purchase of Hess Corp.’s interests in the Stabroek Block offshore Guyana.
CERAWeek: Exxon Mobil CEO Says Not Trying to Acquire Hess
2024-03-18 - CEO Darren Woods said Exxon Mobil is trying to secure preemption rights over Hess Corp.'s Guyana assets in its dispute with Chevron, not buy the company itself.
Chevron CEO Talks Guyana M&A, Exxon Dispute
2024-03-19 - Chevron Corp. CEO Mike Wirth said during CERAWeek by S&P Global that California’s company’s plan to acquire Hess Corporation, and specifically its 30% interest in the Guyana offshore Stabroek Block, was an important deal as well as good one.