Natural Gas Services Group Inc. (NGS), a leading provider of natural gas compression equipment and services, has announced the acquisition of Flatrock Compression Holdings for $120 million in cash and stock. This move significantly strengthens NGS’s position in the natural gas industry, particularly across the Permian Basin and Eagle Ford regions. Flatrock, founded in 2001, is known for its rental compression services and operates a fleet of approximately 86,000 horsepower, with a focus on large horsepower and electric motor-driven units.
The acquisition broadens NGS’s customer base by adding several large clients, while also enhancing its operational footprint in key natural gas producing areas. According to Justin Jacobs, CEO of NGS, the purchase is a strategic step that complements NGS’s existing fleet and aligns well with its commitment to operational excellence and customer service. Flatrock has earned a reputation for reliability and strong field execution, making it an attractive partner in the natural gas compression sector.
Financially, the deal is expected to be immediately accretive, with an acquisition multiple of approximately 6.2 times Flatrock’s adjusted EBITDA as of early 2026. To support this transaction, NGS increased its credit facility from $400 million to $500 million, maintaining flexibility for future growth opportunities. The company remains prudently leveraged with a pro forma leverage ratio near 3 times.
B.J. Ellis, CEO of Flatrock, expressed enthusiasm about joining forces with NGS, highlighting the combined organization’s potential for greater scale and enhanced capabilities. The integration is expected to create new growth opportunities for employees and customers alike while continuing to prioritize safety and innovation.
The expanded compression fleet now includes a mix of gas engine and electric motor-driven compressors ranging from 145 horsepower to over 1,300 horsepower. These units serve both single- and multi-well applications in oil and natural gas production and midstream infrastructure. The acquisition reinforces NGS’s position as a comprehensive provider of natural gas compression technology and rental services across major U.S. oil and gas basins.
NGS plans to hold a conference call to discuss the acquisition details further and provide insights into future strategies following the integration. The company emphasized that this transaction not only strengthens its market presence but also supports shareholder value creation through increased earnings and operational efficiency.
Overall, this acquisition marks a significant development in the natural gas industry’s ongoing consolidation trend, where companies aim to enhance service capabilities and operational density in key production regions. By combining resources and expertise, NGS and Flatrock are positioned to lead advancements in compression technology while meeting growing demand within the energy sector.
