With the acquisition, Regency expects to add a rapidly growing, complementary fee-based business segment and gain significant opportunities to realize synergies in its existing areas of operation. CDM Resource Management also presents growth opportunities for Regency in new regions, including South Louisiana, the Barnett Shale in North Texas, and the Arkoma Basin in West Arkansas.
CDM provides customers with turnkey natural gas contract compression services and operates approximately 540,000 horsepower of field compression in Texas, Louisiana and Arkansas. The company believes that it is a leader in large horsepower natural gas compression applications with 82% of its operating fleet represented by compression units of more than 1,000 horsepower. Following the closing of the deal, Regency will operate more than 700,000 horsepower of compression.
James Hunt, chairman, president and CEO of Regency, said: With this acquisition, we are expanding the scale and scope of our capabilities, securing a stable, fee-based cash-flow stream and creating a steady source of long-term organic growth projects. CDM is a service-minded company with strong core competencies, a unique business model and a strong team culture. Led by its current management team, CDM will operate as a subsidiary of Regency.
