HOUSTON--(BUSINESS WIRE)--June 25, 2008--Exterran Holdings, Inc.
(NYSE:EXH) and Exterran Partners, L.P. (NASDAQ:EXLP) today announced
that Exterran Partners has agreed to acquire contracts serving 33
customers from Exterran Holdings and its affiliates, together with
approximately 640 compressor units used to provide compression
services under those contracts, comprising approximately 247,000
horsepower. The transaction will include approximately 6% (by
available horsepower) of the combined U.S. contract operations
business of Exterran Holdings and Exterran Partners. The transaction,
which is subject to standard closing conditions, including the
expiration or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, is expected to
close in July 2008.
The total value of the transaction is approximately $246 million.
In funding the transaction, Exterran Partners intends to borrow
approximately $175 million under its recently expanded senior secured
credit facility and issue approximately $71 million of new equity to
Exterran Holdings, comprised of approximately 2.4 million common units
and approximately 50,000 general partner units. The transaction is
expected to be accretive to Exterran Partners' cash distributions per
unit by approximately $0.15 per year.
This transaction is a great opportunity for Exterran Partners to
expand its contract operations fleet to comprise approximately 22%, by
available horsepower, of the combined Exterran Holdings and Exterran
Partners U.S. contract operations business, add valuable new customer
relationships and grow distributions for its unitholders, said Daniel
K. Schlanger, Senior Vice President and Chief Financial Officer of
Exterran Partners' general partner.
Exterran Holdings expects to benefit from its continued ownership
in Exterran Partners and the ability to use a portion of the
transaction proceeds to help fund its international growth strategy
and other corporate purposes, added J. Michael Anderson, Senior Vice
President and Chief Financial Officer of Exterran Holdings. We
continue to expect to offer the balance of Exterran Holdings' U.S.
contract operations business to Exterran Partners over time and
utilize the proceeds of those transactions to help fund Exterran
Holdings' growth strategy.
In connection with and upon closing of the transaction, the
omnibus agreement between Exterran Partners and Exterran Holdings will
be amended to reflect adjustments in the cap on selling, general and
administrative costs allocable from Exterran Holdings to Exterran
Partners based on such costs incurred by Exterran Holdings on behalf
of Exterran Partners from $4.75 million per quarter to $6.0 million
per quarter and adjustments in the cap on operating costs from $18.00
per horsepower per quarter to $21.75 per horsepower per quarter. These
caps will be extended for one year and will now terminate on December
31, 2009.
The board of directors of the general partner of Exterran Partners
approved the transaction based on a recommendation from its conflicts
committee. The conflicts committee, which is comprised entirely of
independent directors, retained independent legal and financial
advisors to assist it in evaluating and negotiating the transaction.
About Exterran Holdings and Exterran Partners
Exterran Holdings, Inc. is a global market leader in full service
natural gas compression and a premier provider of operations,
maintenance, service and equipment for oil and gas production,
processing and transportation applications. Exterran Holdings serves
customers across the energy spectrum--from producers to transporters
to storage owners. Headquartered in Houston, Texas, Exterran and its
over 10,000 employees have operations in more than 30 countries.
Exterran Partners, L.P. was formed by Exterran Holdings to provide
natural gas contract operations services to customers throughout the
United States. Exterran Holdings indirectly owns a majority interest
in Exterran Partners.
For more information, visit www.exterran.com.
Forward-Looking Statements
All statements in this release (and oral statements made regarding
the subjects of 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 the control of Exterran Holdings and Exterran
Partners (the Companies), which could cause actual results to differ
materially from such statements. Forward-looking information includes,
but is not limited to statements regarding the ability of the
Companies to complete their proposed transaction and the expected
timing of the closing of the transaction; the expected level of
accretion the transaction will generate to Exterran Partners' cash
distributions per unit; Exterran Partners' expected means of financing
the transaction; the expected benefits of the transaction to Exterran
Holdings and Exterran Partners; and Exterran Holdings' intention to
continue to offer the balance of its U.S. contract operations assets
to Exterran Partners.
While the Companies believe that the assumptions concerning future
events are reasonable, they caution that there are inherent
difficulties in predicting certain important factors that could impact
the future performance or results of their business. Among the factors
that could cause results to differ materially from those indicated by
such forward-looking statements are changes in master limited
partnership equity markets and overall financial markets that impact
the effect of the drop-down of additional assets to Exterran Partners;
changes in tax laws that impact master limited partnerships, including
drop-downs of additional assets to Exterran Partners; conditions in
the oil and gas industry, including a sustained decrease in the level
of supply or demand for natural gas and the impact on the price of oil
and natural gas; Exterran Holdings' ability to timely and
cost-effectively obtain components necessary to conduct the Companies'
business; changes in political or economic conditions in key operating
markets, including international markets; changes in safety and
environmental regulations; the results of the review of the proposed
transaction by regulatory agencies and the failure to satisfy various
other conditions to the closing of the transaction; and changes in
equity and debt markets impacting the ability of Exterran Partners to
finance the transaction in the manner contemplated.
These forward-looking statements are also affected by the risk
factors, forward-looking statements and challenges and uncertainties
described in Exterran Holdings' Annual Report on Form 10-K for the
year ended December 31, 2007, as amended by Amendment No. 1 thereto,
Exterran Partners' Annual Report on Form 10-K for the year ended
December 31, 2007, and those set forth from time to time in the
Companies' filings with the Securities and Exchange Commission, which
are currently available at www.exterran.com. Except as required by
law, the Companies expressly disclaim any intention or obligation to
revise or update any forward-looking statements whether as a result of
new information, future events or otherwise.
CONTACT:
Exterran Holdings, Inc. and Exterran Partners, L.P.
Investors: David Oatman, 281-836-7035
or
Media: Pat (Patricia) Wente, 281-836-7308
or
Media: Rick Goins, 281-836-7289
SOURCE:
Exterran Holdings, Inc. and Exterran Partners, L.P.