HOUSTON - Stewart & Stevenson sold the assets of its natural gas compressor leasing business to Hanover Compressor Co., Houston, for about $60 million in cash and notes.
The agreement also provides for Hanover to purchase gas compression equipment and related support from Stewart & Stevenson, and Stewart & Stevenson will refer subsequent compression leasing business to Hanover.
The natural gas compressor leasing business is a small portion of Stewart & Stevenson's overall equipment rental business. "This portion of our business is fairly new to us," David Stewart of Stewart & Stevenson told RER Reports. "We had built up a 100,000 horsepower fleet, where companies like Hanover have a 1.5 million horsepower fleet. This type of business is their core competency much more than ours."
Stewart & Stevenson is No. 30 on the RER 100, with reported 1999 rental revenue of $33.5 million.