Archrock to buy natgas compression firm TOPS for $983 mln (updated)

Archrock

22/07/2024 22:47

(Adds details throughout)
       July 22 (Reuters) - Energy infrastructure company
Archrock  AROC.N  said on Monday it would buy contract gas
compression services provider Total Operations and Production
Services (TOPS) for about $983 million in cash and stock from
Apollo Global Management funds.
    The acquisition will 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.
    The transaction comes as dealmaking in the Permian shale
basin, the largest U.S. oilfield that straddles West Texas and
New Mexico, has extended to this year after a bumper 2023.    
    "The transaction is expected to be more than 10% accretive
to earnings per share and more than 20% accretive to cash
available for dividend per share in 2025," Archrock CEO Brad
Childers said in a statement.
    Houston, Texas-based Archrock will issue 6.87 million new
shares to TOPS, and will fund the $826 million cash portion with
a combination of equity and debt. 
    Archrock's shares were down 6.9% in extended trading.  
    The deal is expected to close by the end of 2024.
    
    

 (Reporting by Vallari Srivastava in Bengaluru; Editing by Alan
Barona and Sriraj Kalluvila)
 ((Srivastava.Vallari@thomsonreuters.com;))