US oil and gas company Crescent Energy has signed a definitive agreement to acquire SilverBow Resources in a deal worth $2.1bn.
Under the terms of the agreement, for every share of SilverBow common stock, shareholders will get 3.125 shares of Crescent Class A common stock.
Alternatively, shareholders can opt for cash at $38 per share, with a total cash consideration cap of $400m for the deal.
Crescent said the acquisition of SilverBow is set to create the second-largest operator in the Eagle Ford shale basin.
The combined entity will have an estimated production of around 250,000boepd.
The merger is expected to generate annual synergies of $65m–100m through cost savings and operational efficiencies.
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By GlobalDataFollowing the transaction’s completion, Crescent shareholders will hold approximately 69–79% of the new enterprise, while SilverBow shareholders will own around a 21–31% stake.
Crescent CEO David Rockecharlie said: “The combination with SilverBow, which is expected to be immediately accretive to all key per share metrics, solidifies Crescent as a leading operator in the Eagle Ford and strengthens the company’s growth platform with increased scale.
“The combined company will have an attractive and balanced portfolio of stable, low-decline and highly cash-generative production with a deep inventory of proven drilling locations, well-positioned for flexible capital allocation through commodity cycles.”
SilverBow CEO Sean Woolverton said: “The transaction delivers an attractive premium to SilverBow shareholders, with a choice to opt into the significant upside, sustainable value and meaningful synergies that we see in this combination by receiving Crescent shares – or to receive immediate cash liquidity.
“This transaction is consistent with our commitment to pursuing any path that will maximize value for shareholders and is the result of a review of alternatives conducted with the assistance of our financial and legal advisors.”
The deal has already received unanimous approval from both companies’ boards.
The acquisition comes amid challenges from SilverBow’s largest shareholder, Kimmeridge Energy Management, which has been pushing for changes in the company’s board.
The transaction is expected to close by the end of the third quarter of this year, pending customary closing conditions.
