The Woodlands, Texas, Feb 06 — Kodiak Gas Services, Inc. (NYSE: KGS) (“Kodiak” or the “Company”) today announced that it entered into a definitive agreement to acquire Distributed Power Solutions, LLC (“DPS”), a leading provider of turnkey, scalable and highly-reliable distributed power solutions serving a diverse set of customers and end markets, in an equity and cash transaction valued at approximately $675 million (the “Acquisition”), subject to adjustment in accordance with the purchase agreement. The purchase price includes $575 million in cash, subject to adjustment in accordance with the purchase agreement, and the issuance of 2,401,278 shares, representing approximately $100 million of Kodiak common stock, to the sellers.
Strategic Rationale and Transaction Highlights:
Premium Generation Fleet: DPS’s fleet consists of approximately 384 MW of state-of-the-art distributed power generation assets driven by a mix of Caterpillar reciprocating engines and turbines.
Compelling Valuation: The DPS transaction value is equal to approximately 7.4x DPS’s estimated 2026 full year adjusted EBITDA and will be immediately accretive to earnings and discretionary cash flow per share.
Synergistic with Kodiak’s Compression Business: Kodiak has a strong track record of operating and maintaining large horsepower engines at extremely high reliability levels. Kodiak’s experienced team of over 700 Caterpillar-certified technicians, embedded maintenance routines and advanced fleet monitoring and management technologies will further enhance the reliability and real-time monitoring of DPS’s fleet.
Expands Customer Reach with Contracted Cash Flows: DPS will expand Kodiak’s customer base into high-growth digital infrastructure companies and deepen the Company’s relationships with certain upstream and midstream energy customers. Contract portfolio includes 100 MW serving a large data center operator providing 99.9% reliability for more than a year. As “bring your own power” has become the preferred solution for data center developers, Kodiak expects to extend the average life of its contract portfolio through long-term distributed power contracts.
Experienced Management Team: DPS’s management team will join Kodiak, bringing decades of commercial and operational expertise in distributed power.
CEO Commentary
“Distributed power is a natural extension of our large horsepower operations skillset and meaningfully enhances our ability to deliver critical energy infrastructure solutions to our oil and gas customers, while opening new avenues of growth in the fast-growing digital infrastructure end market,” noted Mickey McKee, Kodiak’s President and Chief Executive Officer. “I commend Scott and the entire DPS team for their many successes to date, and I’m thrilled to welcome them to Kodiak.”
“Distributed power demand is growing rapidly. We believe that the speed-to-deployment and competitive pricing relative to an increasingly constrained power grid make distributed power an attractive option for primary, long-term power. Kodiak is committed to powering our critical energy future, and I’m confident that adding DPS will further our goal to help provide safe, reliable, and affordable energy to the world.”
Scott Milligan, President of Distributed Power Solutions, said, “This transaction represents an important milestone for DPS. We have built a scaled, high-quality fleet and a strong operating platform, and Kodiak is a natural platform to launch our next phase of growth. Our shared focus on safety, reliability, and execution positions the combined organization well to serve customers and create long-term value.”