Archrock, Inc. · NYSE:AROC
Archrock — Merger or Acquisition (June 2019)
14 slides from Archrock's merger presentation, Jun 24, 2019
Slide 1: Forward Looking Statements
Forward Looking Statements All statements in this presentation (and oral statements made regarding the subjects of this presentation) other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statement
Slide 2: Important Disclosures
Important Disclosures Archrock has not provided projected net income from the assets to be acquired, the most comparable financial measure calculated in accordance with GAAP, or a reconciliation of projected adjusted EBITDA to projected net income of the assets to be acquired. Archrock does not cont
Slide 3: Transaction Overview
Transaction Overview Archrock to acquire Elite Compression Services, including approximately 430,000 of primarily large compression horsepower1 for total consideration of approximately $410 million Approximately $55 million of annualized adjusted EBITDA2, including $5 million in expected synergies I
Slide 4: Strategic Rationale
Strategic Rationale • • • • Predominantly large HP fleet focused on supporting midstream infrastructure > 90% utilization since inception driven by stable production-driven demand1 ~ 90% of revenue from existing blue-chip customers (Hilcorp & Marathon)2 ~80% of HP backed by long-term, fee-based cont
Slide 5: Midstream Infrastructure Focus
Midstream Infrastructure Focus Maintained focus on large horsepower units, reflecting 73% on a pro-forma basis1 High-utilization assets resulting from focus on servicing midstream gathering applications 97% of acquired units are CAT/Ariel configuration2; well-synchronized with existing Archrock flee
Slide 6: Blue Chip Customer Portfolio Enhanced
Blue Chip Customer Portfolio Enhanced Major Archrock Customers Acquired horsepower backed by complementary base of blue-chip customers Hilcorp Energy and Marathon Oil currently represent ~90% of Elite’s revenue1 Equipment supported by 100% fee-based contracts, with ~80% remaining life >=3 years2 Lon
Slide 7: Attractive Transaction Economics
Attractive Transaction Economics (1) Expected to be achieved within 12 months of transaction close. See slide 3 for important information regarding adjusted EBITDA, a non-GAAP financial measure. (2) Full-year 2020 estimated adjusted EBITDA, including $5mm of synergies. 8 ARCHROCK, INC. (NYSE:AROC) E
Slide 8: Strong Fundamentals Drive Low-Risk Growth
Strong Fundamentals Drive Low-Risk Growth U.S. natural gas supply is increasing, and a significant demand response is occurring Supply Demand Supply more readily available than any time in the industry’s history Monetization of shale revolution Record gas production in 2018 of 83.4 Bcf/d (+12% YoY)1
Slide 9: Financial Position Improved, Targets Maintained
Financial Position Improved, Targets Maintained Immediately accretive to earnings and free cash flow per share Leverage-neutral transaction Sale of non-core assets reduces cash outlay via $30 million of proceeds On track to achieve financial goals, including leverage, dividend growth and coverage th
Slide 10: Enhanced Scale & Complementary Footprint
Enhanced Scale & Complementary Footprint HP, 000’s Contract Operations1 Transaction increases Archrock’s operating horsepower to almost 4 million Further advances Archrock’s position as the largest U.S. provider of compression services by fleet size Existing Archrock operating structure largely supp
Slide 11: Transaction Next Steps
Transaction Next Steps Acquisition & related sale agreement reached Regulatory approval Transaction closing expected Q3 2019 12 ARCHROCK, INC. (NYSE:AROC) Path Forward
Slide 12: An Attractive Energy Infrastructure Investment
An Attractive Energy Infrastructure Investment Midstream / Large HP Focus Resilience Through Cycles Visible, Long-Term Growth Solid Financial Position Proactive Leadership 13 ARCHROCK, INC. (NYSE:AROC) We are the leader in U.S. natural gas compression
Slide 13: Contact Us
CONTACT US Investor Relations Paul Burkhart (Treasurer & VP of Investor Relations) (281) 836-8688 investor.relations@archrock.com www.archrock.com/aroc Corporate Headquarters 9807 Katy Freeway Suite 100 Houston, TX 77024 ARCHROCK, INC. (NYSE:AROC)
Slide 14: Contact Us
CONTACT US Investor Relations Paul Burkhart (Treasurer & VP of Investor Relations) (281) 836-8688 investor.relations@archrock.com www.archrock.com/aroc Corporate Headquarters 9807 Katy Freeway Suite 100 Houston, TX 77024 Archrock