Archrock Announces Private Offering of $500 Million of Senior Notes

Rhea-AI Summary

Archrock (NYSE: AROC) announced that its subsidiary, Archrock Partners, plans to offer $500 million in senior notes due 2032 to eligible purchasers. The net proceeds will primarily fund the cash portion of Archrock's acquisition of Total Operations and Production Services, Any remaining funds will be used for general corporate purposes, potentially including debt repayment. The notes will be offered only to qualified institutional buyers and non-U.S. persons, in compliance with Securities Act regulations. This offering is subject to market conditions and is not contingent on the acquisition's completion. The notes are not registered under the Securities Act and have restrictions on their sale and offer in the United States.

Positive

• Raising $500 million through senior notes offering
• Funding acquisition of Total Operations and Production Services,
• Potential reduction of outstanding borrowings under revolving credit facility

Negative

• Increase in long-term debt obligations
• Potential dilution of shareholder value
• Offering to qualified institutional buyers and non-U.S. persons

News Market Reaction – AROC

+0.79%

1 alert

+0.79% News Effect

On the day this news was published, AROC gained 0.79%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

HOUSTON, Aug. 12, 2024 (GLOBE NEWSWIRE) -- Archrock, Inc. (NYSE: AROC) (“Archrock”) today announced that Archrock Partners, L.P. (“Archrock Partners”), a wholly-owned subsidiary of Archrock, intends, subject to market and other conditions, to offer and sell to eligible purchasers $500 million aggregate principal amount of senior notes due 2032 (the “Notes”). Archrock Partners Finance Corp., a wholly-owned subsidiary of Archrock Partners (together with Archrock Partners, the “Issuers”), will serve as co-issuer of the Notes.

Archrock intends to use the net proceeds from the offering of the Notes to fund a portion of the cash consideration for the previously announced acquisition of 100% of the issued and outstanding membership interests of Total Operations and Production Services, LLC (the “Acquisition”). Archrock intends to use any remaining net proceeds for general corporate purposes, which may include the repayment of indebtedness, including a portion of the outstanding borrowings under Archrock’s revolving credit facility. The Acquisition is not conditioned on the consummation of the offering and the offering is not conditioned on the consummation of the Acquisition.

The Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the rules promulgated thereunder and applicable state securities laws. The Notes will be offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and non-U.S. persons in transactions outside the United States in reliance on Regulation S under the Securities Act.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

About Archrock

Archrock is an energy infrastructure company with a primary focus on midstream natural gas compression and a commitment to helping its customers produce, compress and transport natural gas in a safe and environmentally responsible way. Headquartered in Houston, Texas, Archrock is a premier provider of natural gas compression services to customers in the energy industry throughout the U.S. and a leading supplier of aftermarket services to customers that own compression equipment. For more information on how Archrock embodies its purpose, WE POWER A CLEANER AMERICA, please visit www.archrock.com.

About Archrock Partners

Archrock Partners is a leading provider of natural gas compression services to customers in the oil and natural gas industry throughout the United States. Archrock owns all of the limited and general partnership interests in Archrock Partners.

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 that could cause actual results to differ materially from such statements, many of which are outside Archrock or Archrock Partners’ control. Forward-looking information includes, but is not limited to: statements regarding Archrock Partners’ proposed offering, the completion of such offering, the intended use of net proceeds from the proposed offering, and the impact of market conditions on such offering.

While Archrock and Archrock Partners 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 its business. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: local, regional and national economic conditions and the impact they may have on Archrock Partners’ and its customers; conditions in the oil and gas industry, including the level of production of, demand for or price of oil or natural gas; changes in safety, health, environmental and other regulations; the financial condition of Archrock Partners’ customers; the failure of any customer to perform its contractual obligations; and the performance of Archrock.

These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in Archrock’s Annual Report on Form 10-K for the year ended December 31, 2023, as amended by Amendment No. 1 on Form 10-K/A, Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and those reports set forth from time to time in Archrock’s filings with the Securities and Exchange Commission, which are available at www.archrock.com. Except as required by law, Archrock and Archrock Partners 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: Archrock, Inc.

For information, contact:

Archrock, Inc.

INVESTORS Megan Repine VP of Investor Relations 281-836-8360 investor.relations@archrock.com

MEDIA Andrew Siegel / Jed Repko Joele Frank 212-355-4449

FAQ

What is the purpose of Archrock's $500 million senior notes offering?

Archrock (AROC) plans to use the net proceeds from the $500 million senior notes offering to fund a portion of the cash consideration for its acquisition of Total Operations and Production Services, , with any remaining funds used for general corporate purposes, including potential debt repayment.

When are Archrock's (AROC) newly offered senior notes due?

The senior notes being offered by Archrock Partners, a subsidiary of Archrock (AROC), are due in 2032.

Who is eligible to purchase Archrock's (AROC) new senior notes?

The senior notes are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States in reliance on Regulation S under the Securities Act.

Is Archrock's (AROC) senior notes offering contingent on the completion of its acquisition?

No, the senior notes offering by Archrock (AROC) is not conditioned on the consummation of the acquisition of Total Operations and Production Services, Similarly, the acquisition is not contingent on the completion of the notes offering.