Archrock to Acquire Natural Gas Compression Systems in $357 Million Deal

SEATTLE (Oil Monster): Archrock Inc. is set to acquire Natural Gas Compression Systems Inc. (NGCSI) in a cash and stock deal valued at $357 million, strengthening its position in the natural gas compression market.

The acquisition will add approximately 351,000 horsepower to Archrock’s fleet, including 316,000 operating horsepower and a 35,000-horsepower backlog of contracted new equipment. It will also expand Archrock’s presence in the Permian Basin and enhance its electric motor drive compression capabilities amid growing demand for lower-carbon solutions.

“We’re excited to announce our agreement to acquire NGCS, which further enhances our position as a premier provider of natural gas compression services in the United States,” said Brad Childers, President and CEO of Archrock. “With the addition of NGCS’s portfolio of high-quality, large horsepower and electric compression assets, we are increasing our scale and expanding customer relationships as demand for natural gas and compression remains robust.”

Key Benefits of the Deal

Increased Operating Horsepower: The combined company will have over 4.5 million operating horsepower, with a 10% increase in Permian Basin compression capacity.

Expansion in Key Regions: 71% of NGCS’s horsepower operates in the Permian Basin, further strengthening Archrock’s foothold in the region.

Electric Compression Growth: The deal boosts Archrock’s electric motor drive compression capacity to approximately 815,000 horsepower.

Financial Impact: The acquisition is expected to immediately increase Archrock’s earnings per share and cash available for dividends by the end of 2025.

Under the agreement, Archrock will fund the $298 million cash portion of the purchase with available credit and issue up to 2.312 million new Archrock shares to the sellers. The transaction, unanimously approved by Archrock’s board, is expected to close in the second quarter of 2025, pending customary approvals.

Citi served as financial advisor to Archrock, while Latham & Watkins LLP acted as legal counsel. NGCS was advised by Intrepid Partners, LLC and Honigman LLP.

Courtesy: www.pgjonline.com