• Spin-off company named Exterran Corporation
• Exterran Holdings, Inc. to be renamed Archrock, Inc.
HOUSTON--(BUSINESS WIRE)--Jul. 13, 2015--
Exterran Holdings, Inc. (NYSE:EXH) announced today that its board of
directors has set the record date and distribution date for the spin-off
of its international services and global fabrication businesses into a
stand-alone, publicly traded company named Exterran Corporation.
Exterran Corporation has applied to list its common stock on the New
York Stock Exchange under the symbol “EXTN.”
Upon the completion of the spin-off, Exterran Holdings, which will
continue to own and operate its contract operations and aftermarket
services businesses in the United States, will be renamed Archrock, Inc.
and will trade on the New York Stock exchange under the symbol “AROC.”
Exterran Partners, L.P., a publicly traded master limited partnership
controlled and partially owned by Exterran Holdings, will be renamed
Archrock Partners, L.P. and will trade on the Nasdaq Global Select
Market under the symbol “APLP.”
The two companies will be separated through the distribution of EXTN
common stock to holders of Exterran Holdings common stock on a pro rata
basis. Exterran Holdings shareholders will receive one share of EXTN
common stock for every two shares of EXH common stock held at the close
of business on the record date of July 22, 2015. Subject to the
satisfaction of the conditions to closing, the distribution is expected
to occur after the close of trading on July 31, 2015.
Following the distribution of EXTN common stock, Exterran Corporation
and Archrock will be independent publicly traded companies, and Archrock
will retain no equity interest in Exterran Corporation.
No action is required by Exterran Holdings shareholders in order to
receive shares of EXTN common stock in the distribution. Exterran
Holdings shareholders entitled to receive shares of EXTN common stock in
the distribution will receive a book-entry account statement reflecting
their ownership of EXTN common stock, or their brokerage account will be
credited for the shares.
Trading of Exterran Holdings and Exterran Corporation Shares Prior
to the Distribution Date
In connection with the distribution, beginning on or shortly before the
record date and continuing up to and including the distribution date,
Exterran Holdings expects that there will be three trading markets:
-
In the “regular way” market, shares of Exterran Holdings common stock
will trade under the symbol “EXH” with an entitlement to receive the
EXTN common shares to be distributed on the distribution date. Holders
who sell Exterran Holdings common stock in the regular way market
before the distribution date will also sell their right to receive
EXTN common shares.
-
In the “ex-distribution” market, shares of Exterran Holdings common
stock will trade under the symbol “EXH WI” without the right to the
EXTN common shares to be distributed on the distribution date. Holders
who sell Exterran Holdings common stock in the ex-distribution market
on or before the distribution date will retain their right to receive
EXTN common shares in the distribution.
-
In the “when-issued” market, the right to receive EXTN common shares
on the distribution date will trade under the symbol “EXTN WI.”
Holders who sell the right to EXTN common shares in the when-issued
market on or before the distribution date will retain their shares of
Exterran Holdings common stock.
Prior to the distribution, Exterran Holdings will mail an information
statement to all shareholders entitled to receive the distribution of
EXTN common stock. The information statement will describe Exterran
Corporation, including the risks of owning EXTN common stock and other
details regarding the distribution. Investors are encouraged to consult
with their financial and tax advisors regarding the specific
implications of buying or selling shares of Exterran Holdings common
stock on or before the distribution date.
Information about the Spin-Off, Exterran Corporation and Archrock
after the Spin-Off
The completion of the spin-off is subject to the satisfaction or waiver
of certain customary conditions, including the effectiveness of the
Registration Statement on Form 10 relating to the EXTN common stock, the
EXTN common stock being authorized for listing on the NYSE, the issuance
of new senior notes due 2022 that will be the obligations of two
subsidiaries of Exterran Corporation and other conditions described in
the information statement that will be filed as an exhibit to the Form
10.
Exterran Corporation’s capital structure is expected to include (1) a
new $750 million revolving credit facility that has been executed and
will become available upon the completion of the distribution and the
satisfaction of certain other conditions and (2) subject to market
conditions, new senior notes due 2022. Exterran Corporation initially
intends not to pay a cash dividend on its common stock but its board of
directors will continue to evaluate the appropriateness of paying cash
dividends in the future.
Upon completion of the spin-off, Andrew J. Way will become President and
Chief Executive Officer and Jon C. Biro will become Senior Vice
President and Chief Financial Officer of Exterran Corporation. The Board
of Directors of Exterran Corporation is expected to consist of Andrew C.
Way and current Exterran Holdings directors William M. Goodyear, John P.
Ryan, Christopher T. Seaver, Mark R. Sotir, Richard R. Stewart and Ieda
Gomes Yell, all of whom will resign from the Exterran Holdings board of
directors upon completion of the spin-off.
Upon completion of the spin-off, Exterran Holdings will be renamed
Archrock. Borrowings under Exterran Holdings’ existing credit facility
and Exterran Holdings’ 7.25% senior notes due 2018 will be retired using
the net proceeds of Exterran Corporation’s indebtedness that will be
transferred to Archrock, and Archrock’s new capital structure will
include a new $300 million revolving credit facility that has been
executed and will become available upon the completion of the
distribution. Archrock intends to pay quarterly cash dividends on its
common stock, with its initial cash dividend expected to be announced
before completion of the spin-off. The declaration of future cash
dividends and, if declared, the amount of any such dividends, will be
subject to its financial condition, earnings, capital requirements,
financial covenants, applicable law and other factors its board of
directors deems relevant.
D. Bradley Childers will remain the President and Chief Executive
Officer and David S. Miller, currently the Senior Vice President and
Chief Financial Officer of Exterran Partners, will also become Senior
Vice President and Chief Financial Officer of Archrock. The Board of
Directors of Archrock is expected to consist of current Exterran
Holdings directors Anne-Marie Ainsworth, D. Bradley Childers, Gordon T.
Hall, Frances Powell Hawes, J.W.G. “Will” Honeybourne, James H. Lytal
and Mark A. McCollum.
In connection with the spin-off, Archrock will agree to make support
payments to Exterran Corporation in the event that PDVSA Gas, S.A.
defaults on its obligation to make installment payments to Exterran
Corporation in connection with PDVSA’s 2012 purchase of Exterran
Holdings’ previously nationalized Venezuela assets, if Exterran
Corporation’s total leverage ratio exceeds a specified threshold.
Archrock’s contingent support payments will not exceed $100 million and
will be reduced by, among other things, the amount of payments Exterran
Corporation actually receives from PDVSA after the spin-off, as well as
by the amount of any dividends or share repurchases by Exterran
Corporation and capital expenditures by Exterran Corporation in excess
of a specified threshold.
Goldman, Sachs & Co. is acting as financial advisor and Latham & Watkins
LLP is acting as legal advisor to Exterran Holdings in connection with
the spin-off.
About Exterran Holdings
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 Holdings owns an equity interest, including all of
the general partner interest, in Exterran Partners, L.P. (NASDAQ: EXLP),
a master limited partnership, the leading provider of natural gas
contract compression services to customers throughout the United States.
For more information, visit www.exterran.com.
Upon completion of the spin-off, Exterran Holdings will be renamed
Archrock, Inc. Archrock will be the leading provider of natural gas
contract compression services to customers throughout the United States.
In addition, Archrock will be a leading supplier of aftermarket services
to customers that own compression equipment in the United States.
Archrock will be headquartered in Houston, Texas, operating in the major
oil and gas producing regions in the United States, with approximately
2,500 employees. Archrock will continue to own an equity interest,
including all of the general partner interest, in Archrock Partners,
L.P. (which Exterran Partners will be renamed upon completion of the
spin-off).
About Exterran Corporation
Exterran Corporation will be a market leader in compression, production
and processing products and services, serving customers throughout the
world engaged in all aspects of the oil and natural gas industry. Its
global product lines will include natural gas compression, process &
treating and production equipment and water treatment solutions. Outside
the United States, Exterran Corporation will be a leading provider of
full-service natural gas contract compression and a supplier of new,
used, OEM and aftermarket parts and services. Exterran Corporation will
be headquartered in Houston, Texas, and will operate in approximately 30
countries with approximately 7,000 employees.
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 Exterran Holdings’ control, which could cause actual results to
differ materially from such statements. Forward-looking information
includes, but is not limited to: Exterran Holdings’ plan to separate and
spin-off its international services and global fabrication businesses
into a stand-alone, publicly traded company named Exterran Corporation,
the timing of the distribution of Exterran Corporation common stock, the
possibility that the proposed spin-off will be consummated, statements
regarding the trading of Exterran Holdings and Exterran Corporation
prior to the distribution date, the expected benefits from the proposed
spin-off, statements regarding the expected President and CEO, CFO and
the members of the Board of Directors of each of Exterran Corporation
and Archrock, Inc. (which Exterran Holdings will be renamed after the
spin-off), statements regarding the expected capital structure of each
of Exterran Corporation and Archrock, statements regarding Exterran
Corporation’s use of proceeds from its expected indebtedness, and
statements regarding Archrock’s contingent payment obligation relating
to amounts owed by PDVSA to Exterran Corporation; Exterran Holdings’
financial and operational strategies and ability to successfully effect
those strategies; Exterran Holdings’ financial and operational outlook
and ability to fulfill that outlook, Exterran Holdings’ expectations
regarding future economic and market conditions, and demand for Exterran
Holdings’ products and services and growth opportunities for those
products and services.
While Exterran Holdings 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 factors that could
cause results to differ materially from those indicated by such
forward-looking statements are: local, regional, national and
international economic conditions and the impact they may have on
Exterran Holdings and its 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; delays, costs and difficulties that could impact the completion and
expected results of the proposed separation transaction; Exterran
Holdings’ ability to timely and cost-effectively execute larger
projects; changes in political or economic conditions in key operating
markets, including international markets; any non-performance by third
parties of their contractual obligations; changes in safety, health,
environmental and other regulations; and the performance of Exterran
Partners.
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, 2014, Exterran Corporation’s Registration Statement on Form
10 and Exterran Holdings’ filings with the Securities and Exchange
Commission, which are available at www.exterran.com.
Except as required by law, Exterran Holdings and Exterran Corporation
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.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy the senior notes due 2022 or any other
securities.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150713006275/en/
Source: Exterran Holdings, Inc.
Exterran Holdings, Inc.
Susan Moore, 281-836-7398 (Media)
David
Oatman, 281-836-7035 (Investors)