Houston-based Exterran Holdings Inc. (NYSE: EXH) and Exterran Partners LP (NASDAQ: EXLP) said March 8 that Exterran Partners will acquire assets from Exterran Holdings for consideration valued at $174 million including customer contracts relating to the operation of approximately 259,000 horsepower of compressor units.
“This transaction is another important step in our plan for Exterran Partners to be the growth vehicle for our contract operations business in the United States,” said Brad Childers, president and CEO of Exterran Holdings. “The acquisition will increase Exterran Partners’ contract operations fleet to approximately 2.4 million horsepower, bolstering its leading market position as a provider of natural gas contract operations services in the United States. We plan to continue to create value through Exterran Partners by continued growth through dropdown transactions, organic growth and third party acquisitions.”
David Miller, senior vice president and CFO of Exterran Partners’ managing general partner, said, “We believe the transaction will create economic value for Exterran Partners by increasing distributable cash flow and enhancing its capital position. Additionally, we believe we are making further progress in our goal to reduce and eventually eliminate the need for cost cap contributions from Exterran Holdings.”
The transaction was approved by the conflicts committee of the board of directors of Exterran Partners’ managing general partner. The conflicts committee, which is comprised entirely of independent directors, retained independent legal and financial advisors to assist it in evaluating the transaction.
Exterran Holdings provides full-service natural gas compression and operations, maintenance, service, and equipment for oil and gas production, processing, and transportation applications. Exterran Holdings serves customers across the energy spectrum—from producers to transporters to processors to storage owners. The company has about 10,000 employees and operates in approximately 30 countries.
Exterran Partners provides natural gas contract operations services to customers throughout the United States. Exterran Holdings owns an equity interest in Exterran Partners, including all of the general partner interest.