AROC - Compression Companies Compress: The Archrock - Elite Merger
Archrock (AROC) announced a merger with Elite Compression. Price was $410 million, or $953 per HP.
Source: Archrock Presentation
This is 7.5x expected EBITDA after including approximately $5 million in expected synergies (= $410 million/$55 million EBITDA). With Archrock trading at 8.2 EV/EBITDA TTM according to Yahoo, the merger should be accretive to the shares. Brad Childers, CEO of Archrock confirms this indicating,
.... transaction that will immediately benefit Archrock shareholders through accretive earnings and cash flow growth."
Key to making this accretive for shareholders, approximately half the purchase price will be funded in