Kodiak Gas to Acquire Distributed Power Solutions for 5M | KGS Stock

Kodiak Gas to Acquire Distributed Power Solutions for $675M | KGS Stock

February 5, 2026 discoverhiddenusacom Business

The Woodlands, Texas-based Kodiak Gas Services, Inc. (NYSE: KGS) has reached a definitive agreement to acquire Distributed Power Solutions, LLC (DPS), a provider of distributed power solutions. The transaction, valued at approximately $675 million, is structured as an equity and cash deal.

Expanding Energy Infrastructure Capabilities

Under the terms of the agreement, Kodiak will pay $575 million in cash, subject to adjustments, and issue 2,401,278 shares of its common stock, representing roughly $100 million, to the sellers of DPS. This acquisition is expected to broaden Kodiak’s reach into the rapidly growing digital infrastructure market, alongside its existing oil and gas customer base.

Strategic Rationale

DPS brings a fleet of approximately 384 MW of distributed power generation assets, utilizing Caterpillar reciprocating engines and turbines. Kodiak anticipates the acquisition will be immediately accretive to earnings and discretionary cash flow per share, with a transaction value of approximately 7.4x DPS’s estimated 2026 adjusted EBITDA.

Did You Know? DPS currently serves a large data center operator with 100 MW of power, maintaining a 99.9% reliability rate for over a year.

Kodiak’s President and CEO, Mickey McKee, stated that distributed power aligns with the company’s existing skillset and enhances its ability to deliver critical energy infrastructure solutions. He also highlighted the growth potential within the digital infrastructure sector. Scott Milligan, President of DPS, echoed this sentiment, noting that Kodiak provides a strong platform for the next phase of DPS’s growth.

Synergies and Expertise

Kodiak’s extensive experience in operating and maintaining large horsepower engines – with a team of over 700 Caterpillar-certified technicians – is expected to improve the reliability and monitoring of DPS’s fleet. The company believes the “bring your own power” model is increasingly favored by data center developers, and anticipates extending the life of its contract portfolio through long-term agreements.

Expert Insight: This acquisition represents a strategic move by Kodiak to diversify its revenue streams and capitalize on the increasing demand for reliable, on-site power solutions, particularly within the data center industry. The integration of DPS’s assets and expertise could create significant value for Kodiak’s shareholders.

The transaction, which has been approved by the boards of both companies, is subject to regulatory approvals and customary closing conditions, including those outlined in the Hart-Scott Rodino Antitrust Improvements Act of 1976. Kodiak expects the acquisition to close in early April 2026.

Frequently Asked Questions

What is the total value of the acquisition?

The total transaction value is approximately $675 million, before transaction costs and adjustments, consisting of $575 million in cash and $100 million in Kodiak common stock.

What type of assets does DPS bring to Kodiak?

DPS contributes approximately 384 MW of distributed power generation assets, powered by Caterpillar reciprocating engines and turbines.

When is the acquisition expected to be finalized?

The transaction is expected to close in early April of 2026, pending regulatory approvals and the fulfillment of customary closing conditions.

As Kodiak moves forward with this acquisition, how might the evolving energy landscape influence the integration and long-term success of DPS within the company?