USA Compression Partners LP Expands with Strategic Acquisition of J-W Power Company
USA Compression Partners, LP (NYSE: USAC) has announced a strategic acquisition of J-W Power Company for approximately $860 million. This acquisition is set to enhance USA Compression’s scale and diversify its offerings in the natural gas compression services market.
Details of the Acquisition
The acquisition will be funded by a combination of cash and newly issued common units. USA Compression plans to pay $430 million in cash and issue around 18.3 million common units. This structuring of the agreement is aimed at optimizing financial leverage.
Strategic Advantages
The merger with J-W Power Company brings several compelling benefits:
- Expanded Scale: The combined fleet will yield approximately 4.4 million active horsepower.
- Geographic Diversification: Adds over 800,000 active horsepower across key regions: Northeast, Mid-Con, Rockies, Gulf Coast, Bakken, and Permian Basin.
- Diverse Business Lines: Includes aftermarket services, parts distribution, and specialized manufacturing services.
- Strong Customer Relationships: The acquisition broadens USA Compression’s highly diversified customer base, fostering long-term relationships.
- Market Leadership: Solidifies USA Compression’s position in the mid-to-large horsepower segment.
- Financial Impact: Anticipated near-term accrual of distributable cash flow.
- Valuation: Estimated Adjusted EBITDA multiple of approximately 5.8x for 2026 before synergies.
- Deleveraging: This transaction is expected to accelerate USA Compression’s path to sub-4.0x leverage.
Leadership Insights
Clint Green, President and CEO of USA Compression, emphasized the significance of this acquisition. He noted that integrating J-W Power Company’s operations will enhance USA Compression’s service capacity, addressing the growing demand for natural gas compression.
Transaction Timeline
The acquisition is expected to close in the first quarter of 2026, contingent upon customary closing conditions and regulatory approvals.
Financial Advisors
Wells Fargo is acting as the exclusive financial advisor to USA Compression, while Jefferies LLC served as the financial advisor to J-W Power Company. Legal advisory for USA Compression is provided by Sidley Austin LLP, and Jackson Walker LLP serves in the same capacity for J-W Power Company.
About the Companies
USA Compression Partners is recognized as one of the leading independent providers of natural gas compression services across the United States, focusing on midstream applications. J-W Power Company is a well-established player in the compression sector, known for its diverse fleet and operational excellence in serving over 300 customers across major U.S. basins.
