Archrock Completes Acquisition of Total Operations and Production Services, LLC

Rhea-AI Summary

Archrock (NYSE: AROC) has completed its acquisition of Total Operations and Production Services, (TOPS), adding 580,000 horsepower to its fleet, including 500,000 operating horsepower and a contracted backlog of new equipment. The transaction strengthens Archrock's compression operations in the Permian Basin and establishes its leadership in electric motor drive compression. Archrock issued approximately 6.87 million new common shares to the sellers and funded the $826 million cash portion of the purchase price with proceeds from recent capital markets transactions. The acquisition is expected to be accretive and create significant shareholder value, capitalizing on the robust market for natural gas and compression while increasing returns to shareholders.

Positive

• Acquisition of 580,000 horsepower, including 500,000 operating horsepower
• Strengthens Archrock's position in the Permian Basin
• Establishes leadership in electric motor drive compression
• Accretive transaction expected to create significant shareholder value
• Substantial and contracted backlog of new equipment acquired

Negative

• Issuance of approximately 6.87 million new Archrock common shares, potentially diluting existing shareholders
• $826 million cash portion of the purchase price funded through capital markets transactions, potentially increasing debt

News Market Reaction

-5.83%

1 alert

-5.83% News Effect

On the day this news was published, AROC declined 5.83%, reflecting a notable negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

HOUSTON, Aug. 30, 2024 (GLOBE NEWSWIRE) -- Archrock, Inc. (NYSE: AROC) (“Archrock” or the “Company”) today announced that it has completed its previously announced acquisition of Total Operations and Production Services, LLC (“TOPS”).

“With this accretive transaction, we are adding a young fleet that deepens Archrock’s compression operations in the Permian Basin and establishes our leadership position in electric motor drive compression,” said Brad Childers, President and Chief Executive Officer of Archrock. “We are excited to welcome the TOPS employees to Archrock and work together to expand our exceptional service to new and existing customers and create significant shareholder value. Given our high-quality contracted fleet, technical expertise and an industry-leading balance sheet, we are confident Archrock is poised to capitalize on the attractive opportunities presented by today’s robust market for natural gas and compression, while increasing returns to our shareholders.”

Through the TOPS transaction, Archrock acquired 580,000 horsepower, including approximately 500,000 operating horsepower and a substantial and contracted backlog of new equipment.

At closing, Archrock issued approximately 6.87 million new Archrock common shares to the sellers. In addition, Archrock funded the $826 million cash portion of the purchase price with a portion of the proceeds from its recently completed capital markets transactions.

About Archrock

Archrock is an energy infrastructure company with a primary focus on midstream natural gas compression and a commitment to helping its customers produce, compress and transport natural gas in a safe and environmentally responsible way. Headquartered in Houston, Texas, Archrock is a premier provider of natural gas compression services to customers in the energy industry throughout the U.S. and a leading supplier of aftermarket services to customers that own compression equipment. For more information on how the Company embodies its purpose, WE POWER A CLEANER AMERICA™, visit www.archrock.com.

Forward-Looking Statements

This press release contains forward-looking statements, which include statements about the expected benefits of the acquisition of Total Operations and Production Services, LLC. These statements are not guarantees of future performance or actions. Forward-looking statements rely on a number of assumptions concerning future events and are subject to risks and uncertainties. If one or more of these risks or uncertainties materialize, actual results may differ materially from those contemplated by a forward-looking statement. Forward-looking statements speak only as of the date on which they are made. Archrock expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. A further list and description of risks, uncertainties and other matters can be found in Archrock’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and as set forth from time to time in Archrock’s filings with the Securities and Exchange Commission. These filings are available online at www.sec.gov and www.archrock.com.

For information, contact:

Archrock, Inc.

INVESTORS Megan Repine VP of Investor Relations 281-836-8360 investor.relations@archrock.com

MEDIA Andrew Siegel / Jed Repko Joele Frank 212-355-4449

FAQ

What company did Archrock (AROC) acquire?

Archrock (AROC) acquired Total Operations and Production Services, (TOPS).

How much horsepower did Archrock (AROC) gain from the TOPS acquisition?

Archrock (AROC) gained 580,000 horsepower from the TOPS acquisition, including approximately 500,000 operating horsepower.

How did Archrock (AROC) finance the TOPS acquisition?

Archrock (AROC) financed the TOPS acquisition by issuing approximately 6.87 million new common shares and funding an $826 million cash portion with proceeds from recent capital markets transactions.

What strategic benefits does the TOPS acquisition bring to Archrock (AROC)?

The TOPS acquisition deepens Archrock's (AROC) compression operations in the Permian Basin, establishes its leadership in electric motor drive compression, and adds a substantial contracted backlog of new equipment.