In addition to the above transactions, ETE completed its acquisition of USAC’s general partner and approximately 12.5 million USAC common units from USA Compression Holdings, LLC in exchange for US$250 million in cash.
CDM currently owns and operates approximately 1.6 million hp of natural gas compression and is focused primarily on large horsepower applications. The acquisition of CDM is expected to provide significant benefits for USAC unitholders as the combined business will have increased geographic coverage and will be one of the leading domestic compression providers. The acquisition further expands USAC’s geographic presence into regions where USAC was previously underrepresented and results in USAC having broad coverage across US regions. As part of its overall service offerings, CDM also provides a full range of gas treating and emissions testing services. CDM’s treating activities are complementary to USAC’s growing station services offerings, in which USAC provides turnkey gas handling solutions for customers. With over 70% of horsepower greater than 1000 hp and an average unit size of approximately 700 hp, the CDM fleet has an average age of approximately 7 years and a current operating utilisation rate of over 90%. On a pro forma combined basis, USAC owns and operates a compression fleet of approximately 3.4 million hp.
The transaction is expected to strengthen ETP’s balance sheet by allowing ETP to use the cash proceeds from the transactions to reduce leverage.
