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EXHIBIT 99.1
UNIVERSAL COMPRESSION AND GAS COMPRESSION SERVICES SIGN DEFINITIVE MERGER
AGREEMENT
HOUSTON, August 7, 2000 - Universal Compression Holdings, Inc. (NYSE: UCO) and
privately-held Gas Compression Services, Inc. ("GCSI") today announced that they
have signed a definitive merger agreement under which Universal Compression
Holdings will acquire the Traverse City, Michigan- headquartered GCSI in a cash
and stock transaction.
Under the terms of the merger agreement, GCSI will merge with and into a
wholly-owned operating subsidiary of Universal Compression Holdings. The
shareholders of GCSI will receive an aggregate of $12 million in cash, and a
number of shares of newly issued Universal Compression Holdings common stock
valued at $46 million, while Universal will assume $53 million in debt and
operating leases. The exact number of shares will be based on the trading price
of the common stock on the New York Stock Exchange for a specified trading
period before consummation of the merger. The transaction is subject to
customary closing conditions, including regulatory approvals, and is expected to
be consummated by the end of September.
"We are very pleased to have reached this agreement with GCSI," said Universal
Compression president and chief executive officer Stephen Snider. "GCSI has been
a longstanding, high-quality provider of contract compression services. We are
very pleased that they have chosen to join with Universal Compression. We are
committed to continuing the reputation for service that Mr. R. James Helton, the
founder of GCSI, and his employees have built over the last twenty years.
"The merger with GCSI is in keeping with our growth strategy and is another of
the steps we are taking to create shareholder value by enhancing our position as
one of the leaders in the gas compression services industry. GCSI adds
approximately 170,000 owned horsepower of high quality equipment, all of which
is located domestically and enjoys excellent utilization rates, plus GCSI
operates a significant amount of third party-owned equipment. The combination
will bring to Universal Compression GCSI's fabrication and overhaul facilities
in Michigan and Texas and increase Universal's presence with several key
customers. As a result, the merger will provide Universal with a stronger
position in the Northeastern United States and the Austin Chalk producing area
in Texas. Because our two businesses are very similar with respect to operating
procedures and equipment, we are confidant the two companies' operations can be
integrated quickly and without difficulty," Snider said.
Universal Compression said the addition of the GCSI units should bring the total
size of the combined companies' owned fleet to approximately 825,000 horsepower.
Universal's management believes that GCSI's reputation for high quality,
well-maintained equipment as well as its excellent service reputation, indicates
that the merger should be seamless to GCSI's well-developed base of customers.
This should provide opportunities for the combined companies to generate
increased revenues and earnings while maintaining high utilization rates.
The merger is expected to be immediately accretive to Universal's earnings per
share.
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Universal Compression Holdings, Inc., together with its operating subsidiary
Universal Compression, Inc., is headquartered in Houston, Texas, and is a
leading natural gas compression services company, providing a full range of
rental, sales, operations, maintenance and fabrication services, and products to
the domestic and international natural gas industry.
Gas Compression Services, Inc., is headquartered in Traverse City, Michigan, and
is a leading provider of a broad array of natural gas compression rental,
operations and maintenance services in the U.S., which is complemented by its
compressor equipment fabrication operations. GCSI had fiscal 1999 revenues of
approximately $34 million.
Statements about Universal Compression Holdings' or Gas Compression Services'
outlook and all other statements in this release other than historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements rely on a number
of assumptions concerning future events and are subject to a number of
uncertainties and factors, many of which are outside Universal Compression
Holdings' and Gas Compression Services' control, that could cause actual results
to differ materially from such statements. While Universal Compression Holdings
and Gas Compression Services believe that the assumptions concerning future
events are reasonable, it cautions that there are inherent difficulties in
predicting certain important factors that could impact the future performance of
each business and the consummation or ultimate outcome of the proposed merger.
These factors, when applicable, are discussed in Universal Compression Holdings'
filings with the Securities and Exchange Commission, copies of which are
available to the public. Universal Compression Holdings and Gas Compression
Services disclaim any intention or obligation to revise any forward-looking
statements whether as a result of new information, future event, or otherwise.
