Diversified Energy Co. PLC (DEC.L), a leading energy company, announced on Monday that it has finalized an agreement to acquire Maverick Natural Resources, a portfolio entity of EIG. This strategic acquisition is valued at approximately $1.275 billion, to be settled in cash and stock, and is anticipated to be completed within the first half of 2025.
The transaction, encompassing debt, is valued at 3.3 times the Last Twelve Months (LTM) EBITDA. Funding for the acquisition will be obtained through the assumption of debt, issuance of new Diversified shares, and cash, with adjustments contingent upon Maverick's Reserve-Based Lending facility at the time of closing.
This acquisition aims to consolidate complementary assets, thereby increasing production, enhancing cash flow, and bolstering sustainability and profitability. It notably strengthens Diversified's operations in the Western Anadarko region and introduces new assets in the Permian Basin with multi-zone potential in the Northern Delaware section.
Once the acquisition is completed, the combined company is projected to have an enterprise value of $3.8 billion, operate across five regions, and produce approximately 1,200 MMcfe/d, corresponding to 200 Mboe/d.
EIG will acquire around 20 percent of the outstanding shares post-acquisition, factoring in previous holdings, under a standard lock-up agreement. Should the acquisition be aborted under specific circumstances, Diversified Gas & Oil Corporation may be liable for a break fee of $50 million.
Following the acquisition, the Board of Directors will comprise eight members, incorporating six existing directors from Diversified and two representatives appointed by EIG.
In addition, David Turner from Diversified has been selected as the chair of the Remuneration Committee and will join the Nomination and Governance Committee, effective January 25. Sandy Stash is set to assume the role of lead independent director.
Sylvia Kerrigan has resigned from the Board of Directors, effective January 24, 2025, due to other professional commitments. She had been serving on the Board since 2021.
As of last Friday, Diversified Energy's stock had closed 3.41% lower at $1273 on the London Stock Exchange.
