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Kodiak Gas Services completes acquisition of CSI Compressco

EditorAhmed Abdulazez Abdulkadir
Published 01/04/2024, 15:12
KGS
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THE WOODLANDS, Texas - Kodiak Gas Services, Inc. (NYSE: KGS), a prominent contract compression services provider, announced today the completion of its acquisition of CSI Compressco (NASDAQ:CCLP) LP, positioning the company as the owner of the industry's largest contract compression fleet. The integration of CSI Compressco's team is expected to enhance Kodiak's service offerings, particularly in significant areas like the Permian Basin and Eagle Ford (NYSE:F) Shale.

Mickey McKee, Kodiak's founder and CEO, emphasized the anticipated benefits for customers, employees, and shareholders, highlighting the synergies and incremental value expected from the transaction. As part of the acquisition terms, CSI Compressco unitholders received 0.086 shares of Kodiak common stock for each unit owned, with some electing to receive economic interests in Kodiak's operating subsidiary instead.

Following the acquisition, CSI Compressco's units ceased trading on the NASDAQ at the close of April 1, 2024, while Kodiak shares continue to be listed on the New York Stock Exchange.

Kodiak Gas Services, with a revenue-generating fleet of approximately 4.3 million horsepower, focuses on high-volume gas gathering systems, processing facilities, multi-well gas lift applications, and natural gas transmission systems.

The company's forward-looking statements indicate plans for achieving synergies and addressing the future of the business, including customer retention and financial results. However, these statements are subject to inherent risks, such as demand fluctuations for natural gas and oil, market competition, and general economic conditions.

The completion of this acquisition marks a strategic expansion for Kodiak Gas Services, aiming to strengthen its market position and service capabilities. This news is based on a press release statement by Kodiak Gas Services, Inc.

InvestingPro Insights

As Kodiak Gas Services, Inc. (NYSE: KGS) finalizes its acquisition of CSI Compressco LP, the company's financial and market data reflect a dynamic environment. According to InvestingPro, Kodiak's market capitalization stands at a robust $2.12 billion, underscoring its significant presence in the contract compression industry. The company's revenue has shown a healthy growth, with a 20.13% increase over the last twelve months as of Q4 2023, indicative of its expanding operations and market reach.

InvestingPro Tips suggest that while Kodiak is trading at a high earnings multiple, with a P/E ratio of 89.03, it is expected to see net income growth this year. This projection aligns with the company's strategic expansion through the recent acquisition. Moreover, the stock's low price volatility and its strong return over the last three months, with a 38.35% price total return, could be appealing to investors looking for stable growth opportunities in the energy sector.

For those interested in deeper analysis, InvestingPro offers additional tips on Kodiak and other companies in the sector. By using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription to access these insights. With the completion of its latest acquisition, Kodiak's strategic moves are certainly of interest to those following the energy and utilities markets.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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