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Kodiak Gas Services plans senior notes to refinance debt from acquisition
By Mary-Katherine Stinson
Lexington, Ky., Dec. 19 – Kodiak Gas Services, LLC plans a senior note offering in the first quarter of 2024, the proceeds which would ultimately be used to refinance the debt of CSI Compressco LP after its acquisition by Kodiak, according to a press release.
On Dec. 19 the two companies announced that they had executed a definitive merger agreement under which Kodiak will acquire CSI Compressco in an all-equity transaction valued at approximately $854 million, including the assumption of $619 million of net debt, based on the closing price of Kodiak’s stock on Dec. 18.
In addition, CSI Compressco unitholders will receive 0.086 shares of Kodiak common stock for each CSI Compressco common unit owned, representing a price of approximately $1.65 per unit also based on Kodiak’s closing stock price on Dec. 18.
The transaction is expected to close in the second quarter of 2024, subject to certain regulatory approvals and other closing conditions.
The combined entity is expected to generate approximately $630 million in 2024 adjusted EBITDA after the expected annual run-rate cost synergies of at least $20 million. In addition, Kodiak continues to expect to achieve its long-term leverage target of 3x-3.5x by year end 2025.
Based in Montgomery, Tex., Kodiak supplies contract labor and mechanical expertise for end users of compression, dehydration, processing and treating equipment. CSI Compressco is a provider of compression services and equipment for natural gas and oil production, gathering, transportation, processing and storage and is based in The Woodlands, Tex.
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