EQT Completes Exit from Kodiak, Signaling a New Era for Gas Services

THE WOODLANDS, Texas – December 01, 2025 – In a move that marks the end of a significant chapter, Kodiak Gas Services, Inc. (NYSE: KGS) announced that its largest institutional investor, an affiliate of private equity firm EQT Infrastructure, is selling its entire remaining stake in the company. The secondary offering of 9,762,573 shares, priced at $34.60 each, represents a complete and calculated divestment by EQT, which has backed the gas compression leader since 2019.

While Kodiak itself will receive no proceeds from the sale, the transaction is a pivotal moment for the company, signaling its full transition from a private equity-backed entity to a fully independent public company. For the broader market, this move offers a compelling case study in private equity strategy and the evolving investment landscape for traditional energy infrastructure amidst a global push for decarbonization.

A Calculated Exit: The End of an Era for EQT and Kodiak

EQT Infrastructure’s journey with Kodiak began in February 2019, when it acquired the company with a vision to capitalize on its critical role in the U.S. natural gas value chain. At the time, EQT saw immense potential in Kodiak's large-scale contract compression services, which are essential for moving natural gas from wellheads to pipelines. The strategy was to support Kodiak’s growth, enhance operational efficiencies, and leverage favorable long-term market dynamics, including rising U.S. gas production.

This week’s offering is the culmination of that strategy—a classic private equity lifecycle of acquisition, value creation, and monetization. The exit was not abrupt but executed in deliberate phases throughout 2025. Following a share repurchase by Kodiak in August, EQT proceeded with an offering of 10 million shares in mid-November for approximately $333 million. The latest announcement, detailing the sale of its final 9.76 million shares, closes the book on EQT’s ownership.

Upon completion of the offering, the Stockholders' Agreement between Kodiak and EQT will terminate, and EQT will no longer have the right to nominate members to Kodiak's Board of Directors. This formalizes a shift in governance and strategy, untethering Kodiak from its long-time financial sponsor and marking a new phase of corporate independence. The move reflects a successful investment for EQT, which is capitalizing on a market that remains robust for essential energy infrastructure assets.

Kodiak Stands Alone: Navigating a Post-PE Future

With its largest investor now out of the picture, the spotlight turns squarely to Kodiak's standalone operational and financial strength. The company appears well-prepared for this new chapter. Despite a recent mixed earnings report for the third quarter of 2025—where it impressively beat revenue forecasts by over 37% at $322.74 million but missed EPS projections—the underlying fundamentals paint a picture of resilience and forward momentum.

Kodiak’s operational metrics are robust. Fleet utilization climbed to 97.6% in the last quarter, and the company generated $117 million in discretionary cash flow, a 14% year-over-year increase. This financial health is underscored by a record-setting second quarter in 2025, which saw record free cash flow of $70.3 million and a debt reduction of nearly $50 million. This disciplined capital management has become a hallmark of its strategy.

Looking ahead, Kodiak’s future appears largely secured by long-term contracts. The company has guided for strong discretionary cash flow between $450 and $470 million for the full year 2025 and has stated that its capital spending for 2026 is already effectively fully contracted. This high degree of revenue visibility provides a significant buffer against market volatility. Furthermore, Wall Street sentiment remains overwhelmingly positive. Analysts maintain a strong consensus "Buy" rating, with average price targets hovering around $44 per share, suggesting a potential upside of over 25% from current trading levels. This confidence is bolstered by Kodiak’s consistent dividend, which currently yields over 5.5%, making it an attractive proposition for income-focused investors.

The Broader Current: Private Equity and the Energy Sector's Crossroads

EQT's exit from Kodiak is not happening in a vacuum. It is emblematic of a major trend sweeping the energy sector in 2025, where private equity firms are accelerating their divestments from traditional fossil fuel assets. While PE exits in the renewable energy space have slowed, the market for conventional energy infrastructure is experiencing a surge in activity. This suggests that firms are seizing an opportune moment to monetize mature investments, driven by strong valuations and pent-up investor demand.

The narrative is more nuanced than a simple flight from fossil fuels. The surging global demand for energy, particularly for natural gas to power grids and supply LNG export terminals, underpins the lasting value of companies like Kodiak. Its services are not discretionary; they are a critical link in the energy supply chain. Private equity firms recognize this, and their exits are less a verdict on the sector's viability and more a reflection of disciplined investment cycles. They are selling from a position of strength, having transformed these companies and positioned them for long-term, stable growth.

This trend highlights a strategic bifurcation in the market. While massive capital flows are directed toward decarbonization and green technologies, there is a parallel, pragmatic recognition that the infrastructure supporting today's energy system remains highly valuable and essential for the foreseeable future. For companies like Kodiak, the challenge and opportunity lie in demonstrating this value to a broader public investor base, independent of a large PE sponsor. The company’s focus on operational excellence, high utilization rates, and long-term contracts is precisely the kind of resilient strategy required to thrive in this evolving landscape, proving that even in an era of transition, critical infrastructure remains a cornerstone of the market.