USA Compression Completes $860 Million Acquisition of J-W Power

USA Compression Partners USAC, a Dallas, TX-based oil and gas equipment and services company, has completed the acquisition of J-W Power Company for approximately $860 million. This strategic move significantly enhances USAC's position in the natural gas compression industry and strengthens its market presence across key regions. The transaction is expected to drive robust growth in USA Compression's operations and financial performance.

Transaction Details and Financing Structure

USA Compression financed the acquisition with a combination of cash and equity. The total purchase price included $430 million in cash, funded through its revolving credit facility, alongside the issuance of approximately 18.2 million common units. These common units were issued at an effective price of $23.50 each, calculated based on a 10-day volume-weighted average price as of Nov. 26, 2025. This approach allows for the flexibility to adjust for any changes in market conditions, ensuring a fair and efficient deal for all stakeholders.

The cash portion of the deal was fully covered through USA Compression’s existing credit capacity, minimizing the need for additional external funding. This financial strategy strengthens USA Compression’s balance sheet while enabling it to retain operational agility in the future.

Enhancing Fleet Capabilities With Expanded Active Horsepower

One of the key advantages of this acquisition is the significant expansion of USA Compression’s operational capacity. The deal brings more than 0.8 million active horsepower across several important oil and gas regions. These include the Northeast, Mid-Continent, Rockies, Gulf Coast and Permian Basin — areas that are vital to the natural gas and oil industries.

The addition of these assets brings USA Compression’s total active horsepower to an impressive 4.4 million, further setting its position as one of the leading players in the compression services sector. The expanded fleet will allow USA Compression to better serve its diversified customer base, providing more efficient and scalable solutions across various market segments.

Strategic Benefits for USA Compression’s Commercial Portfolio

The acquisition of J-W Power Company comes with numerous strategic advantages, particularly in expanding USA Compression’s commercial portfolio. The integration of J-W Power Company’s assets diversifies and strengthens USA Compression’s customer base, which is critical for long-term stability and growth. The deal allows USA Compression to deepen its relationships with a broader range of customers, including those in key industries such as natural gas processing, transportation and storage.

In addition, the acquisition supports USA Compression’s ability to offer a wider variety of compression services, from small to mid-sized horsepower solutions, up to the high horsepower systems that are becoming increasingly essential in modern oil and gas operations. This expanded capability provides USA Compression with a competitive edge, positioning it to capitalize on the evolving needs of the industry.

Near-Term Financial Impact and Long-Term Value Creation

From a financial perspective, the acquisition is expected to result in near-term accretion on a Distributable Cash Flow basis, benefiting USA Compression’s unitholders. This is a direct result of the increased operational capacity and enhanced customer base, which are expected to contribute positively to USA Compression’s earnings and cash flow generation.

In addition to short-term financial benefits, the acquisition strengthens USA Compression’s long-term outlook by improving its pro forma debt metrics. The strategic combination of assets enables the company to optimize its capital structure, reducing leverage and providing greater financial flexibility for growth initiatives.

This commitment to value creation reflects USA Compression’s broader strategy of making accretive acquisitions and investments that drive sustainable growth, increase cash distributions to unitholders and position it for continued success in an evolving industry landscape.

Strengthening Position in Mid-to-Large Horsepower Compression

The acquisition of J-W Power Company also significantly reinforces USA Compression’s capabilities in mid-to-large horsepower compression. As the demand for large-scale compression services continues to rise in the energy sector, this acquisition ensures that USA Compression is well-positioned to meet these needs.

By expanding its fleet of high-capacity compression units, USA Compression will be able to serve larger and more complex projects across the key operational regions. This strategic expansion further strengthens its competitive advantage, as the company continues to diversify and broaden the service offerings to meet the demands of both existing and new customers.

Strategic Step Toward Continued Growth and Market Leadership

This acquisition represents a critical step in USA Compression's growth strategy, positioning it for continued leadership in the natural gas compression services sector. By combining its own robust operational capabilities with those of J-W Power Company, USA Compression has created a stronger, more diversified entity that is well-equipped to capitalize on emerging opportunities in the industry.

As the energy sector continues to evolve, USA Compression’s enhanced fleet and expanded customer base will allow it to maintain a competitive edge, drive sustainable growth and deliver long-term value for stakeholders.

Conclusion

The completion of the acquisition of J-W Power Company marks a significant milestone for USA Compression. With a larger and more diversified fleet, enhanced customer relationships and improved financial metrics, USA Compression is well-positioned for success. This strategic move reinforces the company’s commitment to providing high-quality compression services and further strengthens its leadership in the market.

USAC's Zacks Rank & Key Picks

Currently, USAC has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like Cenovus Energy CVE, sporting a Zacks Rank #1 (Strong Buy), TechnipFMC FTI and Oceaneering International OII, carrying a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cenovus Energy is valued at $30.92 billion. It is a Canadian integrated oil and natural gas company, focused on the exploration, production, and transportation of crude oil and natural gas. Cenovus Energy operates primarily in Alberta and is known for its innovative oil sands projects and strong commitment to sustainability and environmental responsibility.

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