(Double Eagle, 5.Apr.2021) — Double Eagle III Midco 2 LLC, wholly owned by DoublePoint Energy, LLC, announced that it has entered into a definitive purchase agreement to sell all leasehold interests, subsidiaries and related assets to Pioneer Natural Resources Company (NYSE:PXD).
This transaction is valued at approximately $6.4bn as of 1 April 2021, comprised of approximately 27.2 million shares of Pioneer common stock, $1 billion of cash and approximately $0.9bn of debt and liabilities. The transaction was unanimously approved by the Board of Directors of each company and is expected to close in the second quarter of 2021, subject to customary closing conditions and regulatory approvals. Double Eagle is backed by equity commitments from funds managed by affiliates of Apollo Global Management, Inc. (NYSE: APO), Quantum Energy Partners, Magnetar Capital, and Blackstone Credit.
Transaction Details
Pioneer will issue approximately 27.2 million shares of common stock in the transaction with an additional $1bn of cash. After closing, existing Pioneer shareholders will own approximately 89% of the combined company and existing DoublePoint owners will own approximately 11% of the combined company. Pioneer plans to finance the cash portion of the purchase price through a combination of cash on-hand and existing borrowing capacity under its revolving credit facility.
The transaction is structured as the acquisition by a Pioneer subsidiary of 100% of the limited liability company interests of DoublePoint’s wholly owned subsidiary, Double Eagle III Midco 1 LLC.
Cody Campbell and John Sellers, Co-CEO’s of DoublePoint said, “We are proud and appreciative of the work that our team has done to build a company and an asset base that is unparalleled in quality and truly cannot be replicated. We are honored to have the opportunity to combine our business with Pioneer, who we have long admired and regard as the premier operator in the Midland Basin. The fit and the synergies are clear, and we look forward to working with Pioneer to continue creating value.”
Geoffrey Strong, Senior Partner and Co-Head of Infrastructure and Natural Resources of Apollo, commented, “The combination of Pioneer and DoublePoint is compelling from both a financial and operational standpoint and a natural fit for DoublePoint. This acquisition continues the trend of consolidation in the prolific Permian Basin, combining two complementary footprints in a transaction with both top- and bottom-line synergies.”
Dheeraj Verma, President of Quantum Energy Partners added, “Quantum feels very fortunate to have had the opportunity to partner with John, Cody, Josh, Blake, Garrett and their team. Double Eagle built a truly world-class business through strong execution and unmatched creativity. Additionally, we are excited to be shareholders in Pioneer as we are firm believers in their strategy of free cash flow generation that enables a competitive base and strong variable dividend.”
Advisors
J.P. Morgan Securities LLC is serving as lead financial advisor to Double Eagle and sponsors, with Citi and RBC Capital Markets also acting as financial advisors. Vinson & Elkins LLP and Alston & Bird LLP are serving as legal advisors to Double Eagle.
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