Kodiak Gas Services Announces Secondary Offering of Common Stock by EQT Affiliate and Share Repurchase Plan
Kodiak Gas Services, Inc. (NYSE: KGS), one of the largest contract compression service providers to the U.S. energy industry, announced the launch of an underwritten public offering of 10,000,000 shares of its common stock. The shares are being offered by Frontier TopCo Partnership, L.P. (the “Selling Stockholder”), an affiliate of EQT Infrastructure III and EQT Infrastructure IV funds. Importantly, Kodiak Gas Services itself is not issuing new stock as part of this transaction and will not receive any proceeds from the sale. All proceeds from the offering will go directly to the Selling Stockholder.
The offering—referred to as the “Offering”—is subject to prevailing market conditions and customary closing requirements. While Kodiak cannot guarantee whether or when the transaction will be completed, the announcement signals a significant step by EQT, Kodiak’s majority shareholder, to reduce its ownership stake while maintaining a relationship with the company.
In conjunction with this secondary offering, Kodiak Gas Services also announced that it plans to repurchase 1,000,000 shares of its common stock directly from the underwriter. This buyback will occur at the same per-share price that the Selling Stockholder receives in the Offering. The repurchase will be conducted under Kodiak’s existing share repurchase program and reflects management’s ongoing commitment to returning value to shareholders.
The Offering itself is not contingent on Kodiak’s repurchase of the shares, but the company’s repurchase is contingent on the Offering being completed. This structure ensures that the buyback will only occur if the public sale of shares closes successfully. Through this transaction, Kodiak aims to mitigate potential dilution effects from the sale and to reinforce confidence in its long-term financial outlook.
Goldman Sachs & Co. LLC is acting as the sole underwriter for the Offering, overseeing the book-building and sale process. As part of standard practice, the Offering will be made only by means of a prospectus supplement and the accompanying base prospectus filed with the U.S. Securities and Exchange Commission (SEC). The offering documents are available under Kodiak’s automatic shelf registration statement on Form S-3 (File No. 333-280737), which became effective on July 10, 2024.
Kodiak Gas Services clarified that this announcement does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where such a transaction would be unlawful before proper registration or qualification under applicable securities laws. The company’s statement aligns with the legal standards governing public securities offerings in the United States.
Strategic Implications of the Offering
This secondary offering represents a transition point in Kodiak’s capital structure, primarily driven by its majority owner EQT’s decision to monetize part of its investment. EQT Infrastructure has played a critical role in the growth of Kodiak Gas Services, providing capital and strategic direction that have enabled the company to scale its operations and strengthen its market leadership in energy infrastructure services. The Offering may also increase Kodiak’s public float, potentially improving liquidity for investors and enhancing its visibility within the public markets.
By choosing to repurchase a portion of the shares being sold, Kodiak is signaling to investors its confidence in the company’s performance and long-term prospects. Share repurchases are often seen as an indicator that management believes the company’s shares are undervalued, reinforcing alignment between executives and shareholders. Moreover, by offsetting a portion of the shares being sold by EQT, the company aims to reduce any potential short-term pressure on its share price following the offering.
Company Background and Market Outlook
Kodiak Gas Services is a key player in the natural gas compression industry, providing critical infrastructure that enables the transportation and processing of natural gas across North America. The company’s compression services are essential to the upstream and midstream energy sectors, supporting natural gas production, gathering, and processing operations. Its business model—based on long-term contracts with leading energy producers—provides stable cash flows and resilience through market cycles.
The company’s operations are closely tied to the broader U.S. energy transition. As natural gas continues to serve as a bridge fuel in the move toward lower-carbon energy systems, the demand for reliable compression services remains robust. Kodiak’s extensive fleet of natural gas compression assets, combined with its maintenance and operational expertise, positions it as a critical enabler of efficient energy delivery.
The company’s financial strategy has focused on balancing growth investments with shareholder returns. The ongoing share repurchase program reflects management’s focus on capital discipline, while continued investments in technology and equipment modernization aim to maintain operational excellence and environmental compliance.
EQT’s Role and Market Significance
EQT Infrastructure’s decision to sell shares through the Offering marks a typical step in private equity ownership cycles, where sponsors gradually exit their investments in successful portfolio companies through public markets. The fact that Kodiak remains operationally strong—with no new equity issuance or dilution—indicates that this transaction is a shareholder-level liquidity event rather than a capital raise for the company itself.
This Offering could also broaden Kodiak’s institutional investor base, as large-scale secondary offerings often attract interest from new long-term investors seeking exposure to the energy infrastructure sector. Given the company’s role in supporting natural gas production and transportation, Kodiak is strategically aligned with ongoing energy security and decarbonization priorities in the United States.
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