Archrock Inc. has priced an underwritten public offering of common stock that the company expects to generate proceeds of $223 million to help fund its $983 million acquisition of gas compression services provider Total Operations and Production Services (TOPS).
Archrock said it will offer 11 million shares of its common stock at a public offering price of $21 per share. Archrock estimated the net proceeds of the offering after deducting the underwriting discount and estimated offering expenses.
The offering is expected to close on July 24, subject to customary closing conditions. Underwriters will have a 30-day option to purchase up to an additional 1.65 million shares.
On July 22, Archrock said it would buy TOPS in a cash-and-stock transaction. The deal stands to increase Archrock's compression capacity by 30% to nearly 2.2 million operating horsepower and its Permian-based assets will represent more than half of its total operating horsepower.
Archrock will use the proceeds of the offering to fund a portion of the TOPS cash acquisition, along with cash on hand, borrowings under Archrock's revolving credit facility and, as market conditions warrant, other debt financings.
In the event that the transaction is not completed, the proceeds from the offering will be used for general corporate purposes.
J.P. Morgan, Evercore ISI, Wells Fargo Securities and Citigroup are acting as joint book-running managers and as underwriters.
Raymond James, RBC Capital Markets, Regions Securities LLC, Scotiabank, First Citizens Capital Securities and Stifel are acting as passive bookrunners.