Archrock Inc., a Houston-based oil and gas company, is buying Elite Compression Services on S.W. Ben Jordan Street in an estimated $410 million transaction that keeps about 100 of its employees in Victoria.
According to Paul Burkhart, Archrock’s treasurer and vice president of investor relations, Archrock will make job offers to all non-executive employees who currently work at Elite Compression Services. Burkhart said there are no current plans to relocate those employees. The agreement was announced last week.
The deal is expected to close during the third quarter of 2019, according to a press release. In the acquisition of the Victoria-based business, Archrock will receive Elite Compression Services’ 430,000 horsepower of compression assets. Archrock is a leading provider of natural gas compression services, which is used in the transportation of oil and natural gas.
Burkhart said his company wanted to acquire a company in a hub for the South Texas region, which he described as a growth basin. He said Archrock already has a strong presence in Eagle Ford and the acquisition is a great opportunity for oil and gas investment.
“This transaction adds basin density in our core areas, with more than 70 percent of the units deployed in the Eagle Ford and South Texas region,” Burkhart wrote in a statement.
In a concurrent transaction, Harvest Midstream Company will acquire about 80,000 horsepower in active and idle compression units from Archrock for $30 million in cash. The statement said the concurrent sale of non-core equipment further standardizes the company’s asset portfolio.
After weighing several possible South Texas acquisitions, Burkhart said Archrock settled on Elite Compression services because of the employees who work there.
“They have a great work ethic,” Burkhart said. “Jerry Blackmon has done a great job of building the company to where it is today.”
Elite Compression Services declined a request for comment.
Elite Compression Services is currently owned by JDH Capital Co., a Houston-based investment firm established to manage the assets of Jeffery D. Hildebrand and his family. After the acquisition, Burkhart said Hildebrand will join Archrock’s board of directors and own approximately 14% of the company.
Burkhart said he was excited for Hildebrand to join the board because of his business acumen and experience in the oil and gas industry.
“We were thrilled for his interest in coming to our board,” Burkhart said.