Kodiak Gas Services Announces Pricing of Underwritten Offering of 5,500,000 Shares of Common Stock by Selling Stockholder

Rhea-AI Summary

Kodiak Gas Services (NYSE: KGS) has announced the pricing of an underwritten offering of 5,500,000 shares of its common stock by an affiliate of EQT Infrastructure III and IV funds. The offering will generate total gross proceeds of $232,925,000. Kodiak will not sell any shares or receive any proceeds from this offering. The offering is expected to close on December 13, 2024.

Goldman Sachs & Co. and J.P. Morgan are serving as the underwriters for the offering, which is being conducted through a prospectus supplement and base prospectus filed with the SEC under an automatic shelf registration statement that became effective on July 10, 2024.

Positive

• None.

Negative

• Large secondary offering of 5.5M shares by major stockholder indicates potential selling pressure
• Company receives no proceeds from the $232.9M offering
• Significant insider selling through EQT Infrastructure funds could signal reduced confidence

Insights

Financial Analyst

This secondary offering of 5.5 million shares priced at $42.35 per share represents a significant liquidation event for EQT Infrastructure funds, totaling $232.9 million. The transaction indicates strong institutional interest in Kodiak's stock, though the increased float could temporarily pressure share prices. While the company won't receive proceeds, the offering enhances stock liquidity and broadens the shareholder base. The involvement of top-tier underwriters Goldman Sachs and J.P. Morgan adds credibility to the offering. The timing and size suggest confidence in Kodiak's current valuation, though existing shareholders may face short-term dilution effects.

Market Research Analyst

The offering's pricing and size reflect robust demand for Kodiak's shares in the energy infrastructure sector. With EQT Infrastructure partially exiting their position, this marks a natural evolution in the company's ownership structure and increases public float availability. The transaction represents approximately 14.5% of Kodiak's market cap, a meaningful but manageable size that shouldn't overwhelm market demand. The shelf registration becoming effective in July 2024 suggests this offering was well-planned and strategically timed. The energy services sector's current momentum likely contributed to the favorable pricing.

THE WOODLANDS, Texas--(BUSINESS WIRE)-- Kodiak Gas Services, Inc. (NYSE: KGS) (“Kodiak” or the “Company”) today announced the pricing of an underwritten offering (the “Offering”) of 5,500,000 shares of its common stock by an affiliate of the funds known as EQT Infrastructure III and EQT Infrastructure IV (the “selling stockholder”) resulting in total gross proceeds of $232,925,000. Kodiak will not sell any shares of its common stock in the Offering and will not receive any proceeds from the sale of the shares of its common stock being offered by the selling stockholder. The Offering is expected to close on December 13, 2024, subject to customary closing conditions.

Goldman Sachs & Co. LLC and J.P. Morgan are acting as the underwriters for the Offering. The Offering is being made only by means of a prospectus supplement and the accompanying base prospectus, which was filed as part of an automatic shelf registration statement on Form S-3 (File No. 333-280737), which was filed with the Securities and Exchange Commission (the “SEC”) and became effective on July 10, 2024. Before you invest, you should read the prospectus in that registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the Offering. Copies of the preliminary prospectus supplement and accompanying base prospectus relating to the Offering, as well as copies of the final prospectus supplement once available, may be obtained for free on the SEC’s website at www.sec.gov or by contacting: Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316 or by emailing Prospectus-ny@ny.email.gs.com; and J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com.

There shall not be any sale of these securities in any state or jurisdiction in which an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Kodiak

Kodiak is the largest contract compression services provider in the United States, serving as a critical link in the infrastructure that enables the safe and reliable production and transportation of natural gas and oil. Headquartered in The Woodlands, Texas, Kodiak provides contract compression and related services to oil and gas producers and midstream customers in high–volume gas gathering systems, processing facilities, multi-well gas lift applications and natural gas transmission systems.

Forward-Looking Statements

This press release includes “forward-looking statements” for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements other than statements of historical fact. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. They include statements regarding the Offering, including the expected closing thereof. Although Kodiak believes the expectations and forecasts reflected in the forward-looking statements are reasonable, Kodiak can give no assurance they will prove to have been correct. They can be affected by inaccurate or changed assumptions or by known or unknown risks and uncertainties. Important risks, assumptions and other important factors that could cause future results to differ materially from those expressed in the forward-looking statements are described under “Risk Factors” in Item 1A of Kodiak’s annual report on Form 10-K for the year ended December 31, 2023 and any updates to those factors set forth in Kodiak’s subsequent quarterly reports on Form 10-Q or current reports on Form 8-K. Kodiak undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241212409505/en/

Investor Contact:

Graham Sones, VP – Investor Relations

ir@kodiakgas.com

(936) 755-3529

Source: Kodiak Gas Services, Inc.

FAQ

How many shares are being offered in the KGS secondary offering?

The secondary offering consists of 5,500,000 shares of Kodiak Gas Services common stock.

What are the gross proceeds from KGS's December 2024 stock offering?

The offering is generating total gross proceeds of $232,925,000.

Will KGS receive any proceeds from the December 2024 stock offering?

No, Kodiak Gas Services will not receive any proceeds from this offering as the shares are being sold by an existing stockholder (EQT Infrastructure funds).

Who are the underwriters for the KGS December 2024 stock offering?

Goldman Sachs & Co. and J.P. Morgan are acting as the underwriters for the offering.

When is the KGS secondary offering expected to close?

The offering is expected to close on December 13, 2024, subject to customary closing conditions.