NEW YORK (TheStreet) -- USA Compression Partners (USAC) stock is lower on Wednesday after the company announced its public offering of 6.6 million shares of common stock, of which 1 million is being offered by unitholders. The Austin, Texas-based will offer the stock at $25.59 per share. Underwriters have been granted a 30-day option to purchase up to an additional 990,000 shares.
By late morning, shares had tumbled 6.8% to $24.96.
Net proceeds of the offering, scheduled to close May 19, will total around $137.9 million. In a statement, the company said it would use proceeds to "reduce the indebtedness outstanding under its revolving credit facility and for general partnership purposes." USA Compression will not receive proceeds sold by unitholders.
Wells Fargo, Barclays, Goldman Sachs, JPMorgan and UBS will act as joint book-running managers, while Raymond James, RBC Capital Markets, Regions Securities and Scotia Capital will act as co-managers.-------------------------------
TheStreet Ratings team rates USA COMPRESSION PRTNRS LP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate USA COMPRESSION PRTNRS LP (USAC) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The area that we feel has been the company's primary weakness has been its poor profit margins."