A more than $1 billion deal has been finalized between Dallas-based Energy Transfer Equity and Energy Transfer Partners L.P. and USA Compression Partners LP of Austin, Texas.
USAC is known as one of the nation’s largest independent providers of compression services and paid $1.232 billion in cash for Energy Transfer’s CDM compression business.
The final acquisition also included 19.2 million USAC common units given to Energy Transfer and 6.4 million USAC Class B units.
At the same time, Energy Transfer Equity wrapped up its $250 million cash acquisition of USAC’s general partner and nearly 12.5 million USAC common units from USA Compression Holdings LLC.
CDM currently operates 1.6 million horsepower of natural gas compression and the acquisition should provide significant benefits for USAC unitholders. The purchase will make the combined businesses as one of the leading domestic compression providers.
Executives at USAC also say the deal will expand the firm’s geographic presence into regions where the company was previously underrepresented.
As for how the deal will affect ETP, the company said it is expected to strengthen the firm’s balance sheet by allowing ETP to use the cash proceeds to reduce leverage.