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Archrock To Acquire Elite Compression For $410 Mln Cash And Stock

Energy infrastructure company Archrock, Inc. (AROC) announced Monday that it agreed to acquire substantially all assets of Elite Compression Services, LLC, a portfolio company of JDH Capital Company, including about 430,000 of predominately large-horsepower compression assets for total consideration of $410 million.

The transaction will be funded with about $205 million of cash and about 21.7 million newly issued Archrock common shares to the seller.

In conjunction with the transaction, Harvest Midstream Co. will acquire about 80,000 active and idle compression horsepower from Archrock for $30 million in cash. Archrock's Board of Directors has appointed energy industry veteran Jeffery Hildebrand, Executive Chairman and Founder, of Hilcorp Energy Company, which is affiliated with JDH Capital and Harvest Midstream, to Archrock's Board of Directors upon closing of the transactions.

We expect the acquired assets to generate about $55 million of annualized adjusted EBITDA, inclusive of $5 million in annualized cost synergies.

In addition, this transaction adds basin density in our core areas, with more than 70% of the units deployed in the Eagle Ford and South Texas region, and the concurrent sale of non-core equipment further standardizes our asset portfolio.

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