HOUSTON--(BUSINESS WIRE)--Feb. 23, 2012--
Exterran Holdings, Inc. (NYSE:EXH) and Exterran Partners, L.P.
(NASDAQ:EXLP) today announced that Exterran Partners has agreed to
acquire compression and processing assets from Exterran Holdings for
consideration valued at approximately $184 million.
Assets to be acquired by Exterran Partners include:
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Compression services. Contracts serving approximately 40 customers of
Exterran Holdings and its affiliates, together with approximately 400
compressor units used to provide compression services under those
contracts, comprising approximately 188,000 horsepower and
representing approximately 5 percent (by available horsepower) of the
combined U.S. contract operations business of Exterran Holdings and
Exterran Partners. In addition, the acquisition includes approximately
140 compressor units comprising approximately 75,000 horsepower
currently being leased from Exterran Holdings to Exterran Partners.
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Processing services. A natural gas processing plant with a capacity of
10 million cubic feet per day located in the northeastern United
States used to provide processing services pursuant to a long-term
services agreement.
“We are pleased with this transaction, which will expand Exterran
Partners’ fee-based business and enhance its leading market position as
a provider of natural gas contract operations services in the United
States. The acquisition will increase Exterran Partners’ contract
operations fleet to approximately 2.1 million horsepower, which would
comprise approximately 58 percent by available horsepower of the
combined U.S. contract operations business of Exterran Holdings and
Exterran Partners,” said Brad Childers, Chairman, President and Chief
Executive Officer of Exterran Partners’ managing general partner.
“Exterran Holdings expects to benefit from its continued ownership in
Exterran Partners and expects to continue to offer the balance of its
U.S. contract operations business to Exterran Partners over time.
Exterran Holdings expects to use a portion of the transaction proceeds
to enhance its capital position through the reduction of debt at the
Exterran parent level,” added Childers, President and Chief Executive
Officer of Exterran Holdings.
In connection with and upon the 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 from $9.0 million per quarter to $10.5 million per
quarter, while the cap on operating costs will remain at $21.75 per
horsepower per quarter. These caps will be extended for one year and
will now terminate on December 31, 2013, unless otherwise extended.
The board of directors of the managing 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 the transaction.
The transaction consideration will include the delivery to Exterran
Holdings of approximately 1.9 million common units of Exterran Partners,
or the cash equivalent thereof, and Exterran Partners’ assumption of a
portion of Exterran Holdings’ indebtedness. In conjunction with the
transaction, Exterran Partners is currently in the process of amending
its revolving credit facility to increase its size by an additional $200
million, which it expects to complete prior to the closing of the
acquisition. Exterran Partners expects to finance the transaction and
continue to finance its business in a manner consistent with its current
and target capital structure. The transaction is subject to
regulatory approval and other closing conditions and is expected to
close prior to the end of the first quarter.
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
processors to storage owners. Headquartered in Houston, Texas, Exterran
has approximately 10,000 employees and operates in approximately 30
countries.
Exterran Partners, L.P. provides natural gas contract operations
services to customers throughout the United States. Exterran Holdings
owns an equity interest in Exterran Partners, including all of the
general partner interest.
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 Section 21E of the
Securities Exchange Act of 1934, as amended. 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: the Companies’ operational and financial strategies and
ability to successfully effect those strategies; Exterran Partners’
expectations regarding the financing of the transaction contemplated by
this release, Exterran Partners’ statements related to the expected
amendment to its revolving credit facility and the expected timing
thereof; the Companies’ financial and operational outlook and ability to
fulfill that outlook; Exterran Holdings’ intention to continue to offer
the balance of its U.S. contract operations business to Exterran
Partners; statements relating to Exterran Holdings’ expected use of
proceeds from the transaction; statements regarding the expected
benefits of the transaction to Exterran Holdings and Exterran Partners;
and statements regarding the ability of the Companies to complete their
proposed transaction and the expected timing of the closing of the
transaction.
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 the capital and financial
markets that impact the effect of the drop-down of additional assets to
Exterran Partners; local, regional, national and international economic
conditions and the impact they may have on the Companies and their
customers; changes in tax laws that impact master limited partnerships;
conditions in the oil and gas industry, including a sustained decrease
in the level of supply or demand for oil or natural gas or a sustained
decrease in the price of oil or natural gas; Exterran Holdings’ ability
to timely and cost-effectively execute larger projects; changes in
political or economic conditions in key operating markets, including
international markets; changes in safety, health, environmental and
other regulations; as to each of the Companies, the performance of the
other entity; 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 the amendment to Exterran
Partners’ revolving credit facility.
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, 2010, Exterran Partners’ Annual Report on Form 10-K for the
year ended December 31, 2010, 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.
Source: Exterran Holdings, Inc. and Exterran Partners, L.P.
Exterran Holdings, Inc. and Exterran Partners, L.P.
Investors:
David
Oatman, 281-836-7035
Media:
Susan Moore, 281-836-7398