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EQT portfolio company Kodiak Gas Services to acquire Pegasus Optimization Managers

EQT Infrastructure portfolio company Kodiak Gas Services (Kodiak) is to acquire Pegasus Optimization Managers (Pegasus) from affiliates of Apollo Natural Resource Partners II, a fund managed by affiliates of Apollo Global Management.

Kodiak’s acquisition of Pegasus solidifies it as an industry leader in service and quality. The combination of Kodiak and Pegasus brings together the two fastest growing contract compression businesses, with the combined youngest fleet in the industry, a focus on exceptional customer service, and technical performance leading to best-in-class mechanical availability and reliability.
Kodiak, acquired by EQT Infrastructure in February 2019, is the largest privately owned and one of the largest contract compression companies in the US; providing necessary compression equipment for the extraction of oil and transportation of natural gas in the United States. As a result of the acquisition, Kodiak will have more than 2,500,000 revenue generating horsepower (HP) deployed across key basins.
Mickey McKee, President and CEO of Kodiak, says: “We are very excited about the acquisition of Pegasus. The combination of Pegasus and Kodiak furthers our strategy of creating the best performing contract compression company in the industry by employing the most talented workforce and utilizing the most sought-after equipment. The cultures, operating philosophies, customer service and employee focus of both companies are one and the same and we are confident that the combined company will continue to build on this strong foundation. We look forward to working together and continuing to provide the best service in the industry to our customers.”
Alex Darden, Partner at EQT Partners, Investment Advisor to EQT Infrastructure, says: “The combination of Pegasus and Kodiak is truly transformational, as it will create a differentiated, large-scale leading contract compression company in the US. Similar to Kodiak, Pegasus’ differentiated service offering, strong commitment to customers and critical infrastructure make the Company and combination unique in the industry, embodying EQT Infrastructure’s approach of targeting high-quality businesses with transformation potential and strong culture. We are excited to support the combined business in its visionary growth plans and look forward to continuing our partnership with such an experienced and talented group of people.”
Chad Lenamon, President and CEO of Pegasus, says: “Kodiak and Pegasus share a common heritage and legacy of excellence. The combined company’s values, partnership approach to problem solving, and commitment to the customer experience will solidify it as the industry leader in efficiency, technology, and runtime. We look forward to partnering with both EQT and Kodiak to build on our momentum and further strengthen our customer offerings. We appreciate the knowledge and support of the Apollo team, as well as all Pegasus employees, and are confident that, together with EQT and Kodiak, we will be well positioned to take advantage of the growth opportunities ahead.”
Olivia Wassenaar, Partner at Apollo, says: “We are proud to have worked with Chad and the entire Pegasus team. They have displayed an impressive entrepreneurial spirit and focus on employee culture and quality of service offering, and we believe the business will continue its success in partnership with Kodiak and EQT. The investment in Pegasus demonstrates Apollo’s focus on identifying opportunities to work with best-in-class management teams across the energy value chain.”
Kirkland & Ellis LLP served as legal counsel to Kodiak and EQT Infrastructure. Jefferies LLC served as exclusive financial advisor and Vinson & Elkins LLP acted as legal counsel to Pegasus and Apollo in connection with the transaction.
The transaction, which is conditioned on customary regulatory approvals, is expected to close in the fourth quarter of 2019. Financial terms of the transaction have not been disclosed.
With this transaction, EQT Infrastructure IV will be 47 per cent invested.

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