Stock Track | Archrock Shares Plummet 5% After Selling Assets to Flowco Holdings

Stock Track
Aug 05

Archrock (NYSE: AROC) saw its shares plummet 5% in Tuesday's trading session following news of a significant asset sale to Flowco Holdings Inc. (NYSE: FLOC). The stock's sharp decline comes in the wake of Flowco's second-quarter earnings report, which revealed a strategic acquisition from Archrock.

According to Flowco's financial results, the company acquired 155 High Pressure Gas Lift and Vapor Recovery systems from Archrock. This transaction, valued at $71 million, was funded through Flowco's revolving credit facility. The move is expected to strengthen Flowco's high-margin rental businesses and expand its fleet of electric motor drive systems.

While the asset sale may contribute to Flowco's growth strategy, investors appear to be reacting negatively to Archrock's divestment of these potentially valuable assets. The market's response suggests concerns about Archrock's future revenue streams and growth prospects following this substantial equipment transfer. As the natural gas compression services sector continues to evolve, this transaction could signal a shift in competitive dynamics between the two companies.

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