Natural Gas Services Group buys Flatrock Compression, adding 150,000 hp to its rental fleet. CEO Justin Jacobs says the deal is accretive within 12 months and deepens exposure to rising Permian gas output.
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Natural Gas Services Group said it would buy Flatrock Compression Holdings, a privately owned rival. The acquisition expands NGS's fleet of natural gas compressors in the Permian Basin and the Eagle Ford Shale.
The move comes as drillers push more gas out of the ground. U.S. natural gas production hit a record in 2025 and has stayed near those levels. That creates demand for compression equipment that moves gas from the wellhead into pipelines.
NGS CEO Justin Jacobs told investors on a conference call Monday morning that the deal will add roughly 150,000 horsepower to the company's rental fleet. He said the two firms share a customer base and that combining them should cut operating costs.
NGS did not disclose the purchase price. The company said it expects the transaction to close in the third quarter. Flatrock's fleet gives NGS access to a newer inventory of large-horsepower compressors that are in short supply.
The rental compression market has been consolidating for several years. Bigger firms enjoy better pricing power and lower maintenance costs per unit. NGS had signaled in its last earnings report that it was looking for acquisitions. The company set a date in May for its first-quarter results.
Jacobs said the Flatrock purchase will be accretive to earnings per share within 12 months. He did not give a specific number. The company plans to use cash on hand and a new credit line to fund the deal.
NGS shares rose 3.2% in afternoon trading Monday. The stock is up 18% this year. The broader S&P 500 energy sector has gained 6% over the same period.
Some investors are cautious about execution risk. Integrating two rental fleets takes time. Dispatchers must learn new equipment. Customer contracts need to be renegotiated. Jacobs said the integration plan is straightforward because the two companies already operate in the same regions and serve the same customers.
NGS said it will host a follow-up call for investors next week to go over the financial details. The company also reiterated its full-year guidance for adjusted Ebitda.
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