What's Going On With Natural Gas Compression Company CSI Compressco Shares Today?
Portfolio Pulse from Lekha Gupta
CSI Compressco LP (CCLP) is being acquired by Kodiak Gas Services, Inc (KGS) in an all-equity deal valued at $854 million, including $619 million of net debt. CCLP unitholders will receive 0.086 shares of KGS stock per unit, equating to $1.65 per unit. The transaction is expected to close in Q2 FY24, subject to regulatory approvals. Post-acquisition, KGS will have the largest contract compression fleet and CCLP unitholders will own about 14% of the combined company. The deal is expected to be accretive to KGS's cash flow per share and neutral to leverage post-synergies. CCLP shares are down 5.42% at $1.57.
December 19, 2023 | 4:07 pm
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NEGATIVE IMPACT
CSI Compressco LP is being acquired by Kodiak Gas Services in an all-equity transaction. CCLP unitholders will receive 0.086 shares of KGS stock per unit, and the deal is expected to close in Q2 FY24. CCLP shares are currently down 5.42%.
The drop in CCLP's share price despite the acquisition announcement may indicate market concerns about the deal terms or future prospects. The short-term impact is negative due to the current price action.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
Kodiak Gas Services is acquiring CSI Compressco LP in an all-equity deal. The transaction is expected to be accretive to KGS's cash flow per share and neutral to leverage post-synergies. KGS will become the owner of the largest contract compression fleet post-acquisition.
The acquisition is likely to be viewed positively for KGS as it is expected to be accretive to cash flow and enhance its market position. The short-term impact is likely positive based on the expected benefits.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 100