THE WOODLANDS, Texas - Kodiak Gas Services, Inc. (NYSE: KGS), a prominent contract compression services provider, announced today the initiation of a public offering of approximately 6.14 million shares by an affiliate of EQT (ST:EQTAB) Infrastructure funds. Concurrently, the company disclosed its plans to repurchase $25 million of its common stock from the selling stockholder in a separate private transaction.
The shares are being offered by an affiliate of EQT Infrastructure III and IV, with the possibility of an additional 921,027 shares available to underwriters through a 30-day option. Kodiak itself will not be selling any shares in this offering and will not receive any proceeds from the shares sold by the selling stockholder.
The number of shares offered publicly will be reduced by the number of shares Kodiak plans to repurchase in the private transaction, which is contingent upon the successful closing of the public offering. The total number of shares in the offering, including the repurchase, will equal 8 million shares.
Barclays, Goldman Sachs & Co. LLC, and J.P. Morgan are serving as the joint book-running managers for the offering. The offering will be conducted through a prospectus supplement and the accompanying base prospectus, part of an automatic shelf registration statement that became effective on July 10, 2024.
This announcement follows the company's forward-looking statements regarding the offering's completion. Kodiak has cautioned that the offering's success is subject to market conditions, and there can be no certainty as to its completion or timing.
Kodiak Gas Services is recognized as the largest contract compression services provider in the United States, playing a vital role in the production and transportation of natural gas and oil. The company's services are integral to high-volume gas gathering systems, processing facilities, multi-well gas lift applications, and natural gas transmission systems.
The information for this report is based on a press release statement from Kodiak Gas Services, Inc. No sale of these securities will occur in any jurisdiction where such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of that state or jurisdiction.
In other recent news, Kodiak Gas Services reported an EBITDA of $154 million, closely aligning with expectations, and a run-rate EBITDA of $162 million when considering adjustments for non-recurring items. The company also increased its quarterly cash dividend by 8% to $0.41 per share for the second quarter of 2024. Several analyst firms have updated their outlook on Kodiak Gas Services. RBC Capital Markets raised its price target from $30.00 to $31.00, while Truist Securities increased its price target to $35.00. Goldman Sachs maintained a Buy rating with a steady price target of $33.00. Stifel also raised its price target from $31.00 to $35.00. These recent developments highlight the strong financial performance and optimistic outlook for Kodiak Gas Services.
InvestingPro Insights
As Kodiak Gas Services, Inc. (NYSE: KGS) navigates the public offering of its shares, investors are closely monitoring the company's financial health and market performance. According to InvestingPro data, Kodiak Gas Services boasts a robust market capitalization of $2.25 billion and has demonstrated significant revenue growth over the last twelve months, with a 29.94% increase. This growth is further underscored by a quarterly revenue surge of 52.31%, reflecting the company’s strong position in the contract compression services sector.
InvestingPro Tips suggest that Kodiak Gas Services is trading at a high earnings multiple, with a current P/E ratio of 44.61. This indicates that investors are willing to pay a premium for its earnings, which may be justified by the company's expected net income growth this year. Additionally, analysts predict that Kodiak will be profitable this year, and the company has been profitable over the last twelve months, which could instill confidence in potential investors considering the stock amidst the new offering.
For those seeking a deeper dive into Kodiak Gas Services' financial outlook, InvestingPro offers additional insights. There are currently 6 more InvestingPro Tips available at InvestingPro, providing a comprehensive analysis that could be crucial for investors making informed decisions during this period of the company's public offering and stock repurchase plan.
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