(Source: Datamonitor)
Exterran Holdings, Inc., a natural gas compression services company, and Exterran Partners, L.P. have announced that Exterran Partners has agreed to acquire compression and processing assets from Exterran Holdings for consideration valued at approximately $228 million.
The acquisition is expected to expand Exterran Partners' contract operations fleet to approximately 1.9 million horsepower which would comprise approximately 52% of the combined Exterran Holdings and Exterran Partners US contract operations business.
"We are pleased to enhance Exterran Partners' position as a leading compression services provider in the US and to enter the processing services market by acquiring natural gas processing assets that benefit from a long-term contract with one of the nation's largest energy producers," said Michael Aaronson, CFO of Exterran Partners' managing general partner.
In connection with and upon closing of the transaction, the omnibus agreement between Exterran Partners and Exterran Holdings will be amended to reflect adjustments in the cap on selling, general and administrative costs from $7.6 million per quarter to $9.0 million per quarter while the cap on operating costs will remain at $21.75 per horsepower per quarter.
The transaction consideration includes the assumption of approximately $159 million of Exterran Holdings debt and the delivery to Exterran Holdings of approximately 2.5 million common units of Exterran Partners, or the cash equivalent thereof, and approximately 51,000 general partner units of Exterran Partners.
Exterran Partners expects to finance the transaction and continue to finance its business in a manner consistent with its current and target capital structure, which may include debt incurred under the partnership's revolving credit facility and/or the issuance of public securities. The transaction is subject to regulatory approval and other closing conditions and is expected to close in June, 2011.
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