Long/short equity, special situations, growth at reasonable price

The Long Case For Exterran Holdings

Elevator Pitch:

  • EXH has plans for dropdowns at MLP level to EXLP. They intend to use partnership as primary vehicle for the long-term growth of U.S. contract operations business. With dropdown of all domestic fleet-horsepower (HP) to partnership at 650/hp (7-8x EBITDA), it is expected that distributions to EXH are going to increase due to GP IDR interests held by EXH and additional LP units acquired in the process. Analysis of the post drop down scenario shows that there is significant unappreciated value in the stock and this has not yet been incorporated into valuation.

Company Description:

Exterran Holdings (EXH) offers energy solutions through a range of products and services portfolio with operations worldwide. The Company is engaged in the...

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