Service Compression Accelerates Growth Strategy with Investment from Warburg Pincus

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Jan 17, 2024, 16:23 ET

LUBBOCK, Texas, Jan. 17, 2024 /PRNewswire/ -- Service Compression, LLC ("Service Compression" or the "Company"), a leading provider of natural gas compression services for exploration and production companies, today announced the closing of a preferred equity investment from Warburg Pincus, a leading global growth investor, through its Capital Solutions Founders Fund. Warburg Pincus' investment comes alongside a new credit facility led by J.P. Morgan and an additional capital raise led by existing and new shareholders. The Company plans to use net proceeds from the combined transactions to repay outstanding borrowings on its existing credit facility with funds managed by Crestline Investors, Inc. and its affiliates and for growth of the Company, including its equipment fleet, as well as working capital support.

Service Compression worked closely with Warburg Pincus to design a solution that provides the Company with a robust, optimized balance sheet enabling the Company to further grow its fleet of compression units to meet the needs of its growing customer base. In particular, Service Compression aims to help customers meet their ESG (environmental, social, and governance) initiatives by accelerating the growth of electric compression units, which have improved performance and lower greenhouse gas emissions.

"Service Compression prides itself on providing compression services to its customers through long-lasting and mutually rewarding relationships," said Rhett Newberry, President, Service Compression. "We are thankful for the continuous support that Dustin Womble and Masked Rider Capital have provided since the inception of our team, as well as our partnership with Crestline since 2022 that enabled the Company to kick off its electric compression strategy. Warburg Pincus' investment in our company underscores the strength of our brand, first-in-class customer service, industry-leading employee base and commitment to ESG initiatives within the upstream oil and gas sector. We look forward to further collaboration with our customers to deliver on their growing and evolving compression needs."

Warburg Pincus has a strong track record of investing in companies committed to the growth of sustainable practices across all sectors. Notable investments include Assent, ClimeCo, Eco Material Technologies, Gradiant, Monolith, Montana Renewables, PTSG, Scale Microgrid Solutions, Mosaic, TRC, and Viridi.

"Demand for electric powered compression equipment continues to grow, especially from blue-chip E&P companies who are looking for partners that can provide them with best-in-class technology and service. Leveraging the expertise of Warburg Pincus' Energy Transition & Sustainability and Capital Solutions teams, Service Compression is well positioned to gain further momentum in this evolving market," said Jeff Luse, Managing Director, Warburg Pincus. "Rhett and the talented Service Compression team have established the Company as a leading platform in the sector, and we look forward to our partnership together," added Gaurav Seth, Managing Director and Americas Head of Capital Solutions, Warburg Pincus.

The Warburg Pincus Capital Solutions Founders Fund was raised in 2023, leveraging the firm's nearly two-decade track record of structured investing in more than 20 completed transactions, with over $4 billion in capital deployed. Capital Solutions professionals work closely with domain experts across Warburg Pincus' core sectors and geographies to source and execute structured value additive transactions.

Moelis & Company served as lead placement agent and Baker Botts L.L.P. served as legal advisor to Service Compression. Imperial Capital also served as placement agent to Service Compression. Willkie Farr & Gallagher LLP served as legal advisor to Warburg Pincus.

About Service Compression

Service Compression is a leading provider of natural gas compression services for exploration and production companies at the wellhead. The company focuses on advancing the ESG (environmental, social, and governance) initiatives of the upstream oil and gas sector through its differentiated service and technology offerings. Service Compression is headquartered in Lubbock, Texas, with field offices in Texas, New Mexico, Oklahoma, and Arkansas.

About Warburg Pincus

Warburg Pincus LLC is a leading global growth investor. The firm has more than $84 billion in assets under management. The firm's active portfolio of more than 250 companies is highly diversified by stage, sector, and geography. Warburg Pincus is an experienced partner to management teams seeking to build durable companies with sustainable value. Since its founding in 1966, Warburg Pincus has invested more than $113 billion in over 1,000 companies in more than 40 countries across its private equity, real estate, and capital solutions strategies. The firm is headquartered in New York with offices in Amsterdam, Beijing, Berlin, Hong Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai, and Singapore. For more information please visit www.warburgpincus.com. Follow us on LinkedIn.