TPG Capital, the global buyout group of TPG, a private investment firm, will purchase a majority share in privately-held Valerus Compression Services, which is a provider of natural gas handling equipment and services, for US$500 million.

Valerus will use the proceeds to fund its growth plans and refinance debt. Chet Erwin will remain as CEO with Dan F. Smith serving as chairman following the completion of the agreement. Smith is currently chairman of Kraton Polymers and previously served as chairman, president and CEO of Lyondell Chemical Co. The deal is expected to close by the end of the year.

“We firmly believe that Valerus is poised to benefit from the continued development of America’s natural gas resources and the growth in gas production from the country’s prolific shale plays. Valerus is also uniquely positioned to help its customers capitalize upon increased natural gas production internationally,” Michael MacDougall, a partner at TPG, said in a release. – Frank Nieto