Kodiak Gas Services To Acquire CSI Compressco In An All-equity Transaction Valued At Approximately $854M, Including Assumption Of $619M Of Net Debt
Portfolio Pulse from Benzinga Newsdesk
Kodiak Gas Services is set to acquire CSI Compressco in an all-equity deal valued at around $854M, which includes taking on $619M of CSI Compressco's net debt. CSI Compressco unitholders will receive 0.086 shares of Kodiak for each unit they own, equating to roughly $1.65 per unit based on Kodiak's stock price as of December 18, 2023.
December 19, 2023 | 11:02 am
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NEUTRAL IMPACT
Kodiak is acquiring CSI Compressco in a significant transaction, which will increase its debt by $619M but potentially add value through expanded operations.
For the acquiring company, the short-term stock price impact can be mixed, as the market weighs the benefits of the acquisition against the costs, including the assumption of debt. Kodiak's assumption of $619M in net debt could be a concern for investors, but the long-term strategic benefits might offset this.
CONFIDENCE 80
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
CSI Compressco unitholders are set to receive 0.086 shares of Kodiak for each unit, which is approximately $1.65 per unit, indicating a potential increase in value for current unitholders.
The acquisition news typically leads to a positive short-term impact on the stock price of the company being acquired due to the premium paid over the market price. In this case, the exchange ratio based on Kodiak's stock price suggests a valuation that could be favorable for CCLP unitholders.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100