HOUSTON, May 29 /PRNewswire/ -- Universal Compression Holdings, Inc.
(NYSE: UCO), a leading provider of natural gas compression services, today
announced that it has entered into a purchase agreement to acquire KCI, Inc.,
a fabricator of large horsepower natural gas compressors based in Tulsa,
Oklahoma, for approximately $22.9 million in cash plus, at the Company's
election, either up to 727,273 shares of Company common stock or an additional
$18.8 million in cash, subject to adjustment. Concurrently with the
acquisition, Universal will repay all of KCI's approximately $57 million in
indebtedness.
KCI fabricates compressor units for sale to the natural gas pipeline
market and other related markets. In addition, KCI has a domestic natural gas
compressor rental fleet of approximately 125,000 aggregate horsepower with an
average horsepower utilization of 85 percent.
"We are pleased about the acquisition of the well-regarded KCI operation
with its experienced workforce and strong customer base. Completion of this
acquisition will augment the Company's large horsepower expertise in both
fabrication and operations and extend its capabilities into the pipeline
compression segment of the market, which generally is characterized by the
fabrication of larger horsepower units for sale to third parties and the
subsequent sales of parts and services for these units," said Stephen A.
Snider, President and Chief Executive Officer. "We believe that an ability to
provide our customers both field and pipeline compression and services will
give us an advantage over other compression companies that typically provide
only one or the other," added Snider.
The KCI transaction, subject to various closing conditions including
regulatory approvals, is expected to be closed by the end of June or in July
2001.
"Under current operating conditions and with anticipated synergies, the
Company expects the acquisition to add revenue of approximately $100 million
and EBITDA of approximately $14.5 million, and to be accretive to earnings per
share by approximately $0.10, in the first full year of operations," said
Snider.
Universal is headquartered in Houston, Texas and is the second largest
natural gas compression services company in the world in terms of horsepower.
The Company provides a full range of rental, sales, operations, maintenance
and fabrication services and products to the domestic and international
natural gas industry.
Statements about Universal's outlook and all other statements in this
release other than historical facts are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements rely on a number of assumptions concerning future
events and are subject to a number of uncertainties and factors, many of which
are outside Universal's control, which could cause actual results to differ
materially from such statements. While Universal believes that the
assumptions concerning future events are reasonable, it cautions that there
are inherent difficulties in predicting certain important factors that could
impact the future performance or results of its business. Among the important
factors that could cause actual results to differ materially from those
indicated by such forward-looking statements are successful completion of the
KCI acquisition, integration of KCI and recent acquisitions and the demand for
Universal's products and services. These risk factors are discussed in
Universal's filings with the Securities and Exchange Commission, copies of
which are available to the public. Universal expressly disclaims any
intention or obligation to revise or update any forward-looking statements
whether as a result of new information, future events, or otherwise.
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SOURCE Universal Compression Holdings, Inc.
CONTACT: David Oatman, Director, Investor Relations of Universal Compression Holdings, Inc., 713-335-7460, or General Inquiries, Jeffrey Wilhoit of The Financial Relations Board BSMG Worldwide, 312-640-6757