Archrock Partners to Acquire Compression Assets from Archrock, Inc.
Archrock, Inc. (NYSE:AROC) and Archrock Partners, L.P. (NASDAQ:APLP)
today announced that Archrock Partners has agreed to acquire assets from
Archrock, Inc. including customer contracts serving 63 customers
together with approximately 270 compressor units used to provide
compression services under those contracts, for consideration of
approximately $85 million. Those compressor units represent
approximately 150,000 horsepower of compression and approximately 4
percent (by available horsepower) of the combined contract operations
business of Archrock, Inc. and Archrock Partners.
The consideration to be paid to Archrock, Inc.’s affiliates will consist
entirely of newly issued Archrock Partners common units and general
partner units. The number of common units to be issued by Archrock
Partners will be determined by the daily volume weighted average price
of Archrock Partners’ common units over the thirty trading days
preceding the closing date. The transaction is subject to regulatory
approvals and other customary closing conditions and is expected to
close in the fourth-quarter of 2016.
In the event the transaction closes prior to the Archrock Partners third
quarter 2016 distribution record date, then Archrock, Inc. has agreed to
waive receipt of Archrock Partners’ third quarter 2016 distribution on
the limited and general partner units received as consideration in the
transaction. Archrock, Inc. will receive the distributions associated
with these units beginning with Archrock Partners’ fourth quarter 2016
distribution, which is expected to be paid in February 2017.
“This transaction expands Archrock Partners’ fee-based business and
enhances its position as the leading provider of natural gas contract
operations services in the United States,” said Brad Childers, President
and Chief Executive Officer of Archrock, Inc. and Archrock Partners.
“Additionally, the transaction improves Archrock Partners’ leverage
profile, is accretive to unitholders, and increases Archrock, Inc.’s
equity interest in Archrock Partners.”
The transaction was approved by the conflicts committee of the board of
directors of Archrock Partners’ managing general partner. The conflicts
committee, which is composed entirely of independent directors, retained
independent legal and financial advisors to assist it in evaluating the
transaction.
About Archrock, Inc. and Archrock Partners
Archrock, Inc. (NYSE:AROC) is a pure-play U.S. natural gas contract
compression services business and a leading supplier of aftermarket
services to customers that own compression equipment in the United
States. Archrock, Inc. holds interests in Archrock Partners, L.P.
(NASDAQ:APLP), a master limited partnership and the leading provider of
natural gas compression services to customers in the oil and natural gas
industry throughout the United States. Archrock, Inc. is headquartered
in Houston, Texas, operating in the major oil and gas producing regions
in the United States, with approximately 1,700 employees.
Archrock Partners, L.P., a master limited partnership, is the leading
provider of natural gas contract compression services to customers
throughout the United States. Archrock, Inc. owns an equity interest in
Archrock Partners, including all of the general partner interest.
For more information, visit www.archrock.com.
Forward-Looking Statements
All statements in this release (and oral statements made regarding the
subjects of this release) other than historical facts are
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements rely on a number of assumptions concerning future events and
are subject to a number of uncertainties and factors, many of which are
outside Archrock’s control, which could cause actual results to differ
materially from such statements. Forward-looking information includes,
but is not limited to: statements about the expected completion of the
proposed transaction and the timing of closing; the anticipated benefits
of the transaction to Archrock, Inc. and Archrock Partners; Archrock,
Inc.’s and Archrock Partners’ financial and operational strategies and
ability to successfully effect those strategies; Archrock, Inc.’s and
Archrock Partners’ financial and operational outlook and ability to
fulfill that outlook; the potential direct and indirect impacts of the
matters described in Archrock’s April 26, 2016 and May 3, 2016 Forms
8-K; and expectations regarding Archrock Partners’ fourth quarter 2016
distribution.
While Archrock, Inc. and Archrock Partners each believe that the
assumptions concerning future events are reasonable, they caution that
there are inherent difficulties in predicting certain important factors
that could impact the future performance or results of their businesses.
Among the factors that could cause results to differ materially from
those indicated by such forward-looking statements are: any delay or
failure to satisfy the conditions to the closing of the transaction;
local, regional and national economic conditions and the impact they may
have on Archrock, Archrock Partners and their customers; changes in tax
laws that impact master limited partnerships; conditions in the oil and
gas industry, including a sustained decrease in the level of supply or
demand for oil or natural gas or a sustained decrease in the price of
oil or natural gas; the financial condition of Archrock, Inc.’s and
Archrock Partners’ customers; any non-performance by customers of their
contractual obligations; and changes in safety, health, environmental
and other regulations.
These forward-looking statements are also affected by the risk factors,
forward-looking statements and challenges and uncertainties described in
the Archrock, Inc. Annual Report on Form 10-K for the year ended
December 31, 2015, the Archrock Partners Annual Report on Form 10-K for
the year ended December 31, 2015, and those set forth from time to time
in Archrock, Inc.’s and Archrock Partners’ filings with the Securities
and Exchange Commission, which are available at www.archrock.com.
Except as required by law, Archrock, Inc. and Archrock Partners
expressly disclaim any intention or obligation to revise or update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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