Exterran Holdings, Inc. (EXH) announced Monday that the board has unanimously authorized the plan to split the company into two standalone, independent publicly traded companies. The company plans to spin-off its international contract operations and aftermarket services as well as the global fabrication businesses in to a separate company.
"This transaction is an extension of our efforts to enhance the performance and unlock the value of all the businesses in the Exterran Holdings portfolio and is consistent with the board of directors' commitment to create long-term, sustainable shareholder value," President and CEO Brad Childers said in a statement.
Following the spin-off, Exterran Holdings will be a pure-play U.S. compression services business. It will also own and operate the U.S. contract operations and aftermarket services businesses.
Meanwhile, the spun-off company (SpinCo) will consist of international contract operations and aftermarket services businesses, with operations in Latin America and parts of the Eastern Hemisphere, and its global fabrication business.
Both the companies will also each have its own independent executive management team and board of directors. Exterran Holdings said it is in the process of identifying individuals who will be appointed to serve as executive officers and directors of each company.
The deal will see Exterran Holdings shareholders retaining their current shares of Exterran Holdings stock and receive a pro-rata dividend of shares of stock in SpinCo. The company also expects to incur one-time charges related to the transaction.
The company noted that splitting the company will help ensure that each business has the management focus, financial strength and flexibility to pursue its own independent strategic priorities.
The company said the dividend policies for Exterran Holdings and SpinCo will be evaluated and announced for each company prior to completion of the transaction.
The spin-off, subject to a shareholder vote and final board approval, is expected to take place during the second half of 2015.
Meanwhile, Exterran Holdings said it does not expect the transaction to result in significant job reductions and also does not anticipate any significant changes to the benefits it offers employees.
EXH closed Friday's regular trading session at $33.77, down $0.59 on a volume of 1.55 million shares.
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