v3.26.1
Business Combination
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combination Business Combination
Flatrock Acquisition
On June 12, 2026 (the “Acquisition Date”), we executed and closed a Securities Purchase Agreement (the “SPA”) with Flatrock Compression Holdings, LLC (“Flatrock”), the holders of all of the membership interests of Flatrock (the “Sellers”) and Mule Deer Sky LLC, acting as the Sellers Representative, to acquire all of the issued and outstanding membership interests of Flatrock from the Sellers, including a current rented fleet of 87,233 horsepower, in exchange for (i) 241,803 shares of common stock, par value $0.01 per share of the Company (“Common Stock”), (ii) $108.9 million in cash, subject to customary post-closing adjustments, and (iii) the right to receive certain royalty payments pursuant to a royalty agreement (the “Flatrock Acquisition”). The Flatrock Acquisition represents the execution of our business strategy to pursue accretive mergers and acquisitions. Furthermore, the Flatrock Acquisition increases our operational density in the Permian Basin and the Eagle Ford as well as adding meaningful customer diversification and attractive opportunities for growth with several new large customers, and complements our fleet with the addition of significant large horsepower and electric motor units. The cash portion of the purchase price was sourced from borrowings under our senior secured revolving credit agreement (as amended and restated from time to time, the “Credit Facility”), as amended by the Fifth Amendment to the Amended and Restated Credit Agreement (the “Fifth Amendment”).
The Flatrock Acquisition has been accounted for by applying the acquisition method of accounting which contemplates the assets acquired and liabilities assumed to be recorded at their fair values on the Acquisition Date. The excess of the total consideration transferred over the fair values of the net assets acquired has been recorded as goodwill. The preliminary purchase price allocation provided below is based upon preliminary estimates and assumptions and is subject to certain adjustments upon management’s review of the final valuations and the working capital adjustment, among others. We are currently in the process of finalizing final valuations attributable to property and equipment, identifiable intangible assets, deferred income taxes, contingent consideration and goodwill. Any adjustments subsequent to the Acquisition Date could impact future depreciation and amortization as well as our income tax provision.
Transaction Consideration
The following table summarizes the estimated fair value of the consideration transferred:
Cash (1)
$108,928 
Common stock issued (2)
9,999 
Contingent consideration53 
$118,980 
(1)    Includes $45.7 million to repay Flatrock’s outstanding line of credit obligation.
(2)    Represents the issuance of 241,803 shares of Common Stock to the Sellers (the number of shares was determined from the 30-day volume weighted-average price as provided for in the SPA).
Preliminary Purchase Price Allocation
The following table summarizes the preliminary purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed as of the Acquisition Date:
Cash and cash equivalents$248 
Trade accounts receivable2,753 
Inventory6,893 
Prepaid expenses and other181 
Rental equipment100,596 
Property and equipment9,711 
Other assets1,369 
Goodwill824 
Intangible assets1,151 
Accounts payable(1,898)
Accrued liabilities(1,824)
Deferred income taxes(315)
Other long-term liabilities(709)
$118,980 
Goodwill
The goodwill arising from the Flatrock Acquisition is primarily attributable to the workforce accompanying the operating assets acquired as well as the expansion of our services in the Permian Basin and Southeast Texas where we currently operate. The goodwill is considered to have an indefinite life and will be reviewed for impairment on an annual basis and when indicators of potential impairment, if any, are present. As the Flatrock Acquisition was structured as an asset purchase for income tax purposes, the goodwill is expected to be fully deductible for U.S. federal income tax purposes.
Intangible assets
The intangible assets acquired include $0.9 million for developed technology and $0.3 million for a tradename, both of which are being amortized over a five-year period. The intangible assets were valued using a “relief from royalties” methodology. We recorded a provision for amortization of the intangible assets for less than $0.1 million from the Acquisition Date through June 30, 2026.
Results of Operations
The results of operations attributable to the Flatrock Acquisition have been included in our Condensed Consolidated Financial Statements from the Acquisition Date through June 30, 2026. Total revenue attributable to the net assets acquired from Flatrock from the Acquisition Date through June 30, 2026 was $2.2 million and pre-tax earnings attributable to the assets acquired and liabilities assumed since the Acquisition Date was $0.8 million.
Transaction costs
In connection with the Flatrock Acquisition, we engaged certain advisors and consultants to assist us with various activities to develop, execute and report the transaction. A substantial portion of costs were incurred during the three months ended June 30, 2026 and we anticipate additional transaction costs to be incurred during the third quarter of 2026, primarily attributable to advisory costs associated with the valuation, purchase price allocation and financial reporting. The following table summarizes transaction costs, primarily legal and diligence, directly attributable to the Flatrock Acquisition incurred during the three months ended June 30, 2026 which was recorded in selling, general and administrative expenses:
Professional fees (1)
$3,065 
Other costs206 
$3,271 
(1)    Includes legal, business diligence, financial advisory and other consulting fees.
Unaudited Pro forma Financial Information
The unaudited supplemental pro forma financial information for the three and six months ended June 30, 2026 was derived by adjusting our historical financial statements in order to give effect to the Flatrock assets acquired and liabilities assumed as though the Flatrock Acquisition occurred as of January 1, 2025 and reflects the following:
•the application of our accounting policies to reflect the changes in depreciation and amortization attributable to the acquired rental equipment, property and equipment and intangible assets;
•the incremental interest expense resulting from borrowings under the Credit Facility to fund the cash component of the consideration transferred;
•the income tax effects of the adjustments described above based on our blended statutory tax rate.
The unaudited pro forma financial information presented below is presented for informational purposes only and is not necessarily indicative of the results of operations that would have occurred had the Flatrock Acquisition been consummated at the beginning of the period presented nor is it necessarily indicative of our future results of operations. Future results may vary significantly from the results reflected in this unaudited pro forma financial information.
Three months endedSix months ended
June 30,June 30,
2026202520262025
Revenue$59,843 $50,486 $118,363 $101,225 
Net income$2,852 $5,216 $10,187 $9,799