Kodiak Gas Services to acquire Distributed Power Solutions in $675 million deal

Kodiak Gas Services has entered into a definitive agreement to acquire Distributed Power Solutions LLC in an equity and cash transaction valued at approximately $675 million, positioning the compression services provider for a broader role in distributed and behind-the-meter power generation.

Under the agreement, the sellers will receive about $575 million in cash and 2,401,278 shares of Kodiak common stock valued at roughly $100 million, subject to customary adjustments. The transaction has been approved by the boards of both companies and is expected to close in early Q2 2026, pending regulatory approvals and standard closing conditions, including clearance under Hart-Scott-Rodino requirements.

Kodiak Gas Services, a contract compression services provider, said it has agreed to acquire Distributed Power Solutions, LLC, a turnkey power solutions provider, in a cash and equity deal for around $675 million. (Image: Kodiak Gas Services)

Kodiak said the acquisition extends its large-horsepower engine operating model into distributed generation, adding a fleet of approximately 384 MW of Caterpillar-powered reciprocating and turbine generator assets serving data center, microgrid and manufacturing customers. Company materials indicate about 364 MW is already under contract, with contracted capacity weighted toward data centers (67%), microgrids (21%) and manufacturing (12%).

The DPS fleet is composed entirely of Caterpillar equipment, including about 223 MW of reciprocating generators and 161 MW of Solar Turbine generators, packaged as turnkey systems designed for rapid deployment and flexible applications across multiple end markets.

Kodiak executives described distributed power as a direct operational fit with the company’s existing compression platform. Kodiak maintains more than 700 Caterpillar-certified technicians and has spent the past decade as a leading buyer and operator of large-horsepower Caterpillar reciprocating engines. Company materials note strong similarities between compression and genset engines in design, components and maintenance profiles, enabling cross-training and shared parts and service strategies. Kodiak also plans to apply its AI and machine-learning-based fleet monitoring tools across the DPS generation fleet.

Kodiak President and CEO Mickey McKee said distributed generation supports both the company’s traditional oil and gas customer base and emerging digital infrastructure demand.

“Distributed power is a natural extension of our large horsepower operations skillset and meaningfully enhances our ability to deliver critical energy infrastructure solutions to our oil and gas customers, while opening new avenues of growth in the fast-growing digital infrastructure end market,” McKee said.

He added that grid constraints and long interconnection timelines are driving interest in on-site generation. Company presentation materials cite industry estimates that adding new grid-scale generation and transmission capacity can take more than six years in some regions, while behind-the-meter and microgrid solutions are expected to supply tens of gigawatts of new data center demand by 2035.

DPS’s contract portfolio includes a multi-year primary power agreement supporting a large data center customer at 99.9% reliability for nearly two years, according to Kodiak. The company said “bring your own generation” models are increasingly favored by developers seeking speed to power and higher certainty of supply.

Scott Milligan, president of Distributed Power Solutions, said the transaction gives DPS a larger platform for expansion.

“We have built a scaled, high-quality fleet and a strong operating platform, and Kodiak is a natural platform to launch our next phase of growth,” Milligan said. “Our shared focus on safety, reliability, and execution positions the combined organization well to serve customers and create long-term value.”

Kodiak said DPS leadership will join the combined organization at closing. Company materials project that adding distributed power will accelerate Kodiak’s growth profile and expand its exposure to long-term contracted cash flows across energy, digital and industrial customers.