Archrock, Inc. has announced its acquisition of Natural Gas Compression Systems, Inc. (NGCSI) and NGCSE, Inc. in a cash and stock transaction valued at approximately $357 million. This strategic move aims to strengthen Archrock’s position as a leading provider of natural gas compression services in the United States.

Brad Childers, Archrock's President and CEO, highlighted that the acquisition enhances the company’s portfolio by adding NGCS’s large horsepower and electric compression assets. He emphasized that this expansion will bolster Archrock’s footprint in key regions like the Permian Basin, where natural gas and compression demand remains high. Childers described the acquisition as a strategic investment aligned with the company’s goal of driving sustained, profitable growth.

Childers also praised NGCSI's talented workforce, noting Archrock’s successful track record of integrating new teams and expressing enthusiasm about welcoming NGCSI employees. “Together, we will maximize uptime for our customers and support cleaner energy solutions in America,” he added.

A.J. Yuncker, President and CEO of NGCSI, echoed this sentiment, highlighting Archrock’s shared values in safety, operational excellence, and customer focus. He noted that the combined companies’ complementary operations will benefit both customers and employees through Archrock’s extensive experience and financial strength.

The acquisition presents several strategic and financial benefits. Archrock’s total operating horsepower will exceed 4.5 million following the merger. NGCSI’s compression fleet, with 71% of its horsepower located in the Permian Basin, will expand Archrock’s compression capacity in the region by 10%, reaching approximately 2.5 million horsepower.

Additionally, the transaction will enhance Archrock’s ability to serve the growing demand for low-carbon solutions. NGCSI’s electric motor drive compression assets, totaling around 78,000 horsepower, will complement Archrock’s existing electric motor drive operations, increasing its total electric-driven compression capacity to approximately 815,000 horsepower.

Financially, the acquisition is expected to be immediately accretive to Archrock’s earnings per share and cash available for dividends by the end of 2025. The purchase price reflects a transaction multiple of less than 7.0x the expected run-rate of annualized July 2025 adjusted EBITDA, excluding any projected synergies.

To finance the transaction, Archrock will allocate $298 million in cash from its ABL credit facility and issue up to 2.312 million new Archrock common shares to NGCSI’s sellers. This funding approach aligns with Archrock’s target leverage ratio range of 3.0 to 3.5 times.

The transaction has received unanimous approval from Archrock’s Board of Directors and is expected to close in the second quarter of 2025, subject to customary closing conditions.