Stock News in Focus: Archrock (NYSE:AROC)

Archrock (NYSE:AROC) stock identified change of 34.30% away from 52-week low price and recently located move of -29.09% off 52-week high price. It has market worth of $1268.09M and dividend yield of 5.44%. AROC stock has been recorded -0.24% away from 50 day moving average and -3.08% away from 200 day moving average. Moving closer, we can see that shares have been trading 5.16% off 20-day moving average.

June 24, 2019- Archrock (NYSE:AROC) announced that it has entered into a definitive agreement to acquire substantially all assets of Elite Compression Services, LLC (Elite), a portfolio company of JDH Capital Company, including approximately 430,000 of predominately large-horsepower compression assets for total consideration of $410 million. The transaction will be funded with approximately $205 million of cash and approximately 21.7 million newly issued Archrock common shares to the seller.  In conjunction with the transaction, Harvest Midstream Company (Harvest Midstream) will acquire approximately 80,000 active and idle compression horsepower from Archrock for $30 million in cash. Archrock’s Board of Directors has appointed energy industry veteran Jeffery D. Hildebrand, Executive Chairman and Founder, of Hilcorp Energy Company, which is affiliated with JDH Capital and Harvest Midstream, to Archrock’s Board of Directors upon closing of the transactions.

We are excited to announce the acquisition of Elite’s excellent contract compression operations in a transaction that will immediately benefit Archrock shareholders through accretive earnings and cash flow growth, said Brad Childers, President and Chief Executive Officer of Archrock. The assets being acquired from Elite are highly utilized, predominantly large-horsepower compression units, more than 80% of which are contracted for more than three years with blue-chip customers. We expect the acquired assets to generate approximately $55 million of annualized adjusted EBITDA, inclusive of $5 million in annualized cost synergies. In addition, this transaction adds basin density in our core areas, with more than 70% of the units deployed in the Eagle Ford and South Texas region, and the concurrent sale of non-core equipment further standardizes our asset portfolio. We believe these transactions support our ability to achieve our stated financial targets, including reducing our leverage to below 4.0x in 2020, growing our dividend between 10% and 15% annually through 2020, and maintaining dividend coverage of more than 2.0x through 2020.

Archrock and Elite have been fantastic service providers of ours for many years, and we are pleased to be partnering with a company that is aligned with our strategy of natural gas production growth and best in class midstream operations.  They have sufficient scale, experience and capabilities to grow with us over time, said Jeff Hildebrand. Further, I am very proud of the extraordinary effort and leadership Jerry Blackmon and the management team at Elite have exhibited since the company was formed.  I am also excited to serve on the Archrock board, and look forward to working with the company to further advance Archrock’s strategy as both a board member and substantial owner.

The Basic Materials sector company, Archrock noticed change of 0.21% to $9.75 along volume of 1176002 shares in recent session compared to an average volume of 771.01K. The stock observed return of 6.91% in 5 days trading activity. The stock was at 2.42% over one month performance. AROC’s shares are at 3.28% for the quarter and driving a -18.41% return over the course of the past year and is now at 30.17% since this point in 2018.

The average volatility for the week at 2.22% and for month was at 2.94%. There are 130.06M shares outstanding and 127.74M shares are floated in market. Right now the stock beta is 2.7.

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