Texas service companies Kodiak Gas Services and CSI Compressco LP have executed a definitive merger agreement in which Kodiak will acquire CSI in an all-equity transaction valued at approximately $854 million, including the assumption of $619 million of net debt, the companies said Dec. 19.
Kodak’s addition of CSI Compressco's fleet will give Kodiak the largest contract compression fleet in the industry, with 4.3 million revenue-generating horsepower, including 2.8 MMhp in the Permian Basin. The deal also extends Kodiak's service offerings deeper into the natural gas value chain through CSI Compressco's treating, gas cooling and aftermarket services businesses.
“This enhanced scale will allow Kodiak to continue to provide the highest level of service in the industry and deepen its industry-leading footprint in key operating areas such as the Permian Basin and Eagle Ford Shale,” the companies said. “Like Kodiak, CSI Compressco's natural gas compression revenues are supported by fixed-revenue contracts with inflation-protection mechanisms intended to drive stable cash flows through commodity price cycles.”