USA Compression Partners, LP (USAC) has entered into a definitive agreement to acquire J‑W Power Company for a total consideration of approximately $860 million. The purchase price is split evenly between $430 million in cash—drawn from USAC’s revolving credit facility—and the issuance of roughly 18.3 million new USAC common units valued at $430 million based on a 10‑day volume‑weighted average price as of November 26, 2025.
The deal will add more than 0.8 million active horsepower to USAC’s fleet, bringing the combined company’s capacity to about 4.4 million horsepower. The acquisition extends USAC’s geographic footprint into key U.S. basins—Permian, Bakken, Gulf Coast, Northeast, Mid‑Continent, and Rockies—and brings a diversified customer base of over 300 accounts, many of which have long‑term service contracts. By adding J‑W Power’s aftermarket services, parts distribution, and manufacturing capabilities, USAC will be able to cross‑sell to its existing customers and capture higher‑margin service revenue.
Financially, the transaction is expected to be accretive on a distributable cash‑flow basis and to accelerate USAC’s path to a debt‑to‑EBITDA ratio below 4.0x. As of Q3 2025, USAC’s leverage stood at 3.9x, and the acquisition’s cash component will reduce debt while the equity issuance preserves liquidity. The combined entity is projected to generate an estimated 5.8x EV/EBITDA in 2026, a discount to USAC’s standalone 2026 multiple, underscoring the deal’s value creation potential.
USAC’s recent earnings provide context for the acquisition’s impact. In Q3 2025, the company posted revenue of $250.3 million—slightly above estimates—and EPS of $0.26, beating the consensus of $0.24 by $0.02. The beat was driven by strong demand in the mid‑to‑large horsepower segment and disciplined cost management, which helped maintain margins despite modest price pressure. Adjusted EBITDA of $160.3 million and distributable cash flow of $103.8 million further illustrate the company’s solid operating performance and the capacity to fund the acquisition without over‑leveraging.
Market reaction to the announcement was positive, with analysts noting the deal’s accretive effect on 2026 multiples and the accelerated deleveraging trajectory. Texas Capital Securities highlighted that the transaction represents a 3.1x discount to its 2026 EV/EBITDA estimate and that the combined entity’s diversified service mix should support steady cash‑flow generation. The 8.32% dividend yield also adds appeal for income‑focused investors, reinforcing confidence in USAC’s cash‑flow stability.
Clint Green, USAC’s President and CEO, emphasized that the acquisition is a milestone step toward becoming the leading provider of natural‑gas compression services. He noted that J‑W Power’s 60‑year legacy, strong customer relationships, and manufacturing capabilities will enhance USAC’s ability to meet growing demand across the U.S. market. Green also highlighted the strategic fit of J‑W Power’s aftermarket and parts distribution network, which will deepen customer engagement and create cross‑sell opportunities.
The transaction is expected to close in the first quarter of 2026, subject to customary conditions and regulatory approvals.
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