• Spin-off company named Exterran
Corporation
• Exterran Holdings, Inc. to be renamed
Archrock, Inc.
Exterran Holdings, Inc. (NYSE:EXH) announced today that its
board of directors has set the record date and distribution date
for the spin-off of its international services and global
fabrication businesses into a stand-alone, publicly traded company
named Exterran Corporation. Exterran Corporation has applied to
list its common stock on the New York Stock Exchange under the
symbol “EXTN.”
Upon the completion of the spin-off, Exterran Holdings, which
will continue to own and operate its contract operations and
aftermarket services businesses in the United States, will be
renamed Archrock, Inc. and will trade on the New York Stock
exchange under the symbol “AROC.” Exterran Partners, L.P., a
publicly traded master limited partnership controlled and partially
owned by Exterran Holdings, will be renamed Archrock Partners, L.P.
and will trade on the Nasdaq Global Select Market under the symbol
“APLP.”
The two companies will be separated through the distribution of
EXTN common stock to holders of Exterran Holdings common stock on a
pro rata basis. Exterran Holdings shareholders will receive one
share of EXTN common stock for every two shares of EXH common stock
held at the close of business on the record date of July 22, 2015.
Subject to the satisfaction of the conditions to closing, the
distribution is expected to occur after the close of trading on
July 31, 2015.
Following the distribution of EXTN common stock, Exterran
Corporation and Archrock will be independent publicly traded
companies, and Archrock will retain no equity interest in Exterran
Corporation.
No action is required by Exterran Holdings shareholders in order
to receive shares of EXTN common stock in the distribution.
Exterran Holdings shareholders entitled to receive shares of EXTN
common stock in the distribution will receive a book-entry account
statement reflecting their ownership of EXTN common stock, or their
brokerage account will be credited for the shares.
Trading of Exterran Holdings and Exterran Corporation Shares
Prior to the Distribution Date
In connection with the distribution, beginning on or shortly
before the record date and continuing up to and including the
distribution date, Exterran Holdings expects that there will be
three trading markets:
- In the “regular way” market, shares of
Exterran Holdings common stock will trade under the symbol “EXH”
with an entitlement to receive the EXTN common shares to be
distributed on the distribution date. Holders who sell Exterran
Holdings common stock in the regular way market before the
distribution date will also sell their right to receive EXTN common
shares.
- In the “ex-distribution” market, shares
of Exterran Holdings common stock will trade under the symbol “EXH
WI” without the right to the EXTN common shares to be distributed
on the distribution date. Holders who sell Exterran Holdings common
stock in the ex-distribution market on or before the distribution
date will retain their right to receive EXTN common shares in the
distribution.
- In the “when-issued” market, the right
to receive EXTN common shares on the distribution date will trade
under the symbol “EXTN WI.” Holders who sell the right to EXTN
common shares in the when-issued market on or before the
distribution date will retain their shares of Exterran Holdings
common stock.
Prior to the distribution, Exterran Holdings will mail an
information statement to all shareholders entitled to receive the
distribution of EXTN common stock. The information statement will
describe Exterran Corporation, including the risks of owning EXTN
common stock and other details regarding the distribution.
Investors are encouraged to consult with their financial and tax
advisors regarding the specific implications of buying or selling
shares of Exterran Holdings common stock on or before the
distribution date.
Information about the Spin-Off, Exterran Corporation and
Archrock after the Spin-Off
The completion of the spin-off is subject to the satisfaction or
waiver of certain customary conditions, including the effectiveness
of the Registration Statement on Form 10 relating to the EXTN
common stock, the EXTN common stock being authorized for listing on
the NYSE, the issuance of new senior notes due 2022 that will be
the obligations of two subsidiaries of Exterran Corporation and
other conditions described in the information statement that will
be filed as an exhibit to the Form 10.
Exterran Corporation’s capital structure is expected to include
(1) a new $750 million revolving credit facility that has been
executed and will become available upon the completion of the
distribution and the satisfaction of certain other conditions and
(2) subject to market conditions, new senior notes due 2022.
Exterran Corporation initially intends not to pay a cash dividend
on its common stock but its board of directors will continue to
evaluate the appropriateness of paying cash dividends in the
future.
Upon completion of the spin-off, Andrew J. Way will become
President and Chief Executive Officer and Jon C. Biro will become
Senior Vice President and Chief Financial Officer of Exterran
Corporation. The Board of Directors of Exterran Corporation is
expected to consist of Andrew C. Way and current Exterran Holdings
directors William M. Goodyear, John P. Ryan, Christopher T. Seaver,
Mark R. Sotir, Richard R. Stewart and Ieda Gomes Yell, all of whom
will resign from the Exterran Holdings board of directors upon
completion of the spin-off.
Upon completion of the spin-off, Exterran Holdings will be
renamed Archrock. Borrowings under Exterran Holdings’ existing
credit facility and Exterran Holdings’ 7.25% senior notes due 2018
will be retired using the net proceeds of Exterran Corporation’s
indebtedness that will be transferred to Archrock, and Archrock’s
new capital structure will include a new $300 million revolving
credit facility that has been executed and will become available
upon the completion of the distribution. Archrock intends to pay
quarterly cash dividends on its common stock, with its initial cash
dividend expected to be announced before completion of the
spin-off. The declaration of future cash dividends and, if
declared, the amount of any such dividends, will be subject to its
financial condition, earnings, capital requirements, financial
covenants, applicable law and other factors its board of directors
deems relevant.
D. Bradley Childers will remain the President and Chief
Executive Officer and David S. Miller, currently the Senior Vice
President and Chief Financial Officer of Exterran Partners, will
also become Senior Vice President and Chief Financial Officer of
Archrock. The Board of Directors of Archrock is expected to consist
of current Exterran Holdings directors Anne-Marie Ainsworth, D.
Bradley Childers, Gordon T. Hall, Frances Powell Hawes, J.W.G.
“Will” Honeybourne, James H. Lytal and Mark A. McCollum.
In connection with the spin-off, Archrock will agree to make
support payments to Exterran Corporation in the event that PDVSA
Gas, S.A. defaults on its obligation to make installment payments
to Exterran Corporation in connection with PDVSA’s 2012 purchase of
Exterran Holdings’ previously nationalized Venezuela assets, if
Exterran Corporation’s total leverage ratio exceeds a specified
threshold. Archrock’s contingent support payments will not exceed
$100 million and will be reduced by, among other things, the amount
of payments Exterran Corporation actually receives from PDVSA after
the spin-off, as well as by the amount of any dividends or share
repurchases by Exterran Corporation and capital expenditures by
Exterran Corporation in excess of a specified threshold.
Goldman, Sachs & Co. is acting as financial advisor and
Latham & Watkins LLP is acting as legal advisor to Exterran
Holdings in connection with the spin-off.
About Exterran Holdings
Exterran Holdings, Inc. is a global market leader in
full-service natural gas compression and a premier provider of
operations, maintenance, service and equipment for oil and gas
production, processing and transportation applications. Exterran
Holdings serves customers across the energy spectrum – from
producers to transporters to processors to storage owners.
Headquartered in Houston, Texas, Exterran has approximately 10,000
employees and operates in approximately 30 countries. Exterran
Holdings owns an equity interest, including all of the general
partner interest, in Exterran Partners, L.P. (NASDAQ: EXLP), a
master limited partnership, the leading provider of natural gas
contract compression services to customers throughout the United
States. For more information, visit www.exterran.com.
Upon completion of the spin-off, Exterran Holdings will be
renamed Archrock, Inc. Archrock will be the leading provider of
natural gas contract compression services to customers throughout
the United States. In addition, Archrock will be a leading supplier
of aftermarket services to customers that own compression equipment
in the United States. Archrock will be headquartered in Houston,
Texas, operating in the major oil and gas producing regions in the
United States, with approximately 2,500 employees. Archrock will
continue to own an equity interest, including all of the general
partner interest, in Archrock Partners, L.P. (which Exterran
Partners will be renamed upon completion of the spin-off).
About Exterran Corporation
Exterran Corporation will be a market leader in compression,
production and processing products and services, serving customers
throughout the world engaged in all aspects of the oil and natural
gas industry. Its global product lines will include natural gas
compression, process & treating and production equipment and
water treatment solutions. Outside the United States, Exterran
Corporation will be a leading provider of full-service natural gas
contract compression and a supplier of new, used, OEM and
aftermarket parts and services. Exterran Corporation will be
headquartered in Houston, Texas, and will operate in approximately
30 countries with approximately 7,000 employees.
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, many of which are outside Exterran
Holdings’ control, which could cause actual results to differ
materially from such statements. Forward-looking information
includes, but is not limited to: Exterran Holdings’ plan to
separate and spin-off its international services and global
fabrication businesses into a stand-alone, publicly traded company
named Exterran Corporation, the timing of the distribution of
Exterran Corporation common stock, the possibility that the
proposed spin-off will be consummated, statements regarding the
trading of Exterran Holdings and Exterran Corporation prior to the
distribution date, the expected benefits from the proposed
spin-off, statements regarding the expected President and CEO, CFO
and the members of the Board of Directors of each of Exterran
Corporation and Archrock, Inc. (which Exterran Holdings will be
renamed after the spin-off), statements regarding the expected
capital structure of each of Exterran Corporation and Archrock,
statements regarding Exterran Corporation’s use of proceeds from
its expected indebtedness, and statements regarding Archrock’s
contingent payment obligation relating to amounts owed by PDVSA to
Exterran Corporation; Exterran Holdings’ financial and operational
strategies and ability to successfully effect those strategies;
Exterran Holdings’ financial and operational outlook and ability to
fulfill that outlook, Exterran Holdings’ expectations regarding
future economic and market conditions, and demand for Exterran
Holdings’ products and services and growth opportunities for those
products and services.
While Exterran Holdings believes that the assumptions concerning
future events are reasonable, it cautions 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,
national and international economic conditions and the impact they
may have on Exterran Holdings and its customers; changes in tax
laws that impact master limited partnerships; conditions in the oil
and gas industry, including a sustained decrease in the level of
supply or demand for oil or natural gas or a sustained decrease in
the price of oil or natural gas; delays, costs and difficulties
that could impact the completion and expected results of the
proposed separation transaction; Exterran Holdings’ ability to
timely and cost-effectively execute larger projects; changes in
political or economic conditions in key operating markets,
including international markets; any non-performance by third
parties of their contractual obligations; changes in safety,
health, environmental and other regulations; and the performance of
Exterran Partners.
These forward-looking statements are also affected by the risk
factors, forward-looking statements and challenges and
uncertainties described in Exterran Holdings’ Annual Report on Form
10-K for the year ended December 31, 2014, Exterran Corporation’s
Registration Statement on Form 10 and Exterran Holdings’ filings
with the Securities and Exchange Commission, which are available at
www.exterran.com. Except as required by law, Exterran Holdings and
Exterran Corporation 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.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy the senior notes due 2022 or any
other securities.
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version on businesswire.com: http://www.businesswire.com/news/home/20150713006275/en/
Exterran Holdings, Inc.Susan Moore, 281-836-7398 (Media)David
Oatman, 281-836-7035 (Investors)
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