Energy infrastructure company Archrock said on July 22 it would buy contract gas compression services provider Total Operations and Production Services (TOPS) for about $983 million in cash and stock from Apollo Global Management funds.

The acquisition will increase Archrock's Permian Basin compression capacity by 30% to nearly 2.2 million operating horsepower and its Permian-based assets will represent more than half of its total operating horsepower.

The transaction comes as dealmaking in the Permian shale basin, the largest U.S. oilfield that straddles West Texas and New Mexico, has extended to this year after a bumper 2023.

"The transaction is expected to be more than 10% accretive to earnings per share and more than 20% accretive to cash available for dividend per share in 2025," Archrock CEO Brad Childers said in a statement.

Houston, Texas-based Archrock will issue 6.87 million new shares to TOPS, and will fund the $826 million cash portion with a combination of equity and debt.

Archrock's shares were down 6.9% in extended trading.

The deal is expected to close by the end of 2024.

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