Kodiak Gas Services to Buy DPS for $675M, Adds 384-MW Fleet
Kodiak Gas Services has agreed to acquire Distributed Power Solutions for $675 million, comprising $575 million cash and $100 million stock for DPS’s 384-MW Caterpillar engine and turbine fleet, with the deal closing in April. Kodiak’s shares rallied over 20% and analysts lifted price targets to $49 and $53.
1. Acquisition Terms
Kodiak Gas Services agreed to acquire Distributed Power Solutions for $675 million in a deal comprising $575 million cash and $100 million in Kodiak common stock. The acquisition includes DPS’s fleet of 384 megawatts of Caterpillar-powered reciprocating engines and turbines and is expected to close in April 2026.
2. Strategic Rationale
Kodiak aims to leverage its expertise in natural gas compression to expand into the faster-growing distributed power generation market. The addition of DPS’s fleet is designed to enhance Kodiak’s energy infrastructure offerings and target new end markets such as digital infrastructure, while capitalizing on demand for rapid-deployment, grid-constrained power solutions.
3. Market Reaction and Analyst Updates
Following the announcement, Kodiak’s shares rallied more than 20% in early February. Barclays raised its price target from $42 to $49, while Citi lifted its target from $48 to $53, both citing the DPS acquisition as a significant growth driver for Kodiak’s core service portfolio.