Kodiak Gas Services, Inc. (NYSE: KGS) has entered into a definitive agreement to acquire Distributed Power Solutions, LLC (DPS), a provider of turnkey, scalable distributed power solutions. The transaction is valued at approximately $675 million, consisting of $575 million in cash and the issuance of 2,401,278 shares of Kodiak common stock, representing roughly $100 million of equity.
The deal is expected to close in early April 2026, subject to regulatory approvals and customary closing conditions. DPS operates a fleet of about 384 MW of distributed power generation assets, primarily powered by Caterpillar reciprocating engines and turbines, and serves both digital‑infrastructure and oil‑and‑gas customers. The transaction is priced at roughly 7.4 times DPS’s estimated 2026 full‑year adjusted EBITDA, a valuation that reflects the strong demand for reliable, self‑contained power in data‑center and other high‑growth markets.
Kodiak’s acquisition of DPS expands the company’s footprint beyond its core natural‑gas compression services into the distributed power market, a sector driven by data‑center demand and the need for reliable, localized power solutions. The move aligns with Kodiak’s focus on high‑margin, contract‑based services and follows the 2024 acquisition of CSI Compressco LP, which expanded Kodiak’s contract‑compression fleet to the largest in the industry. By adding DPS, Kodiak will broaden its service offering, deepen customer relationships, and create cross‑selling opportunities that can drive incremental revenue and margin expansion.
The transaction is expected to be immediately accretive to Kodiak’s earnings and discretionary cash flow per share. Management anticipates that Kodiak’s expertise in large‑horsepower compression, predictive maintenance, and real‑time fleet monitoring will enhance DPS’s fleet reliability and operational efficiency, creating synergies that support the company’s long‑term growth strategy. The acquisition also provides a platform for future expansion into electrified and hybrid power solutions, positioning Kodiak to capitalize on the evolving energy infrastructure landscape.
"Distributed power is a natural extension of our high‑horsepower operations and will enhance our ability to deliver critical infrastructure to oil and gas customers while opening new growth avenues in the digital‑infrastructure sector," said Mickey McKee, President and CEO of Kodiak. The acquisition underscores Kodiak’s commitment to diversifying its revenue base and leveraging its technical capabilities to serve emerging markets.
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