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December 22, 2020updated 26 Nov 2021 12:07pm

Diamondback Energy signs deal to acquire QEP Resources for $2.2bn

US-based Diamondback Energy has signed a definitive agreement to acquire oil and gas exploration and production (E&P) firm QEP Resources in an all-stock transaction valued at about $2.2bn.

By Himaja Ganta

US-based Diamondback Energy has signed a definitive agreement to acquire oil and gas exploration and production (E&P) firm QEP Resources in an all-stock transaction valued at about $2.2bn.

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Under the terms of the deal, QEP stockholders will receive 0.05 shares of Diamondback common stock in exchange for each share of QEP common stock.

The transaction price represents an indirect value of $2.29 a share to each QEP stockholder, based on the closing price of Diamondback common stock on 18 December.

Diamondback Energy noted that the deal value also includes QEP’s $1.6bn net debt.

Diamondback Energy CEO Travis Stice said: “The business combination with QEP and the Guidon transaction are accretive on all relevant 2021 financial metrics including free cash flow per share, cash flow per share and leverage, even before accounting for synergies.

“Most importantly, the addition of this Tier-1 resource competes for capital right away in Diamondback’s current portfolio, and we will now be able to allocate most of our capital to the high-returning Midland Basin for the foreseeable future.”

The transaction has been unanimously approved by the boards of directors of Diamondback and QEP. It is expected to be completed in the first quarter or early second quarter of next year.

The closing of the transaction is dependent on securing approvals of QEP stockholders and other regulatory authorities.

It is also subject to other customary closing conditions.

QEP president and CEO Tim Cutt said: “We believe that this strategic merger with Diamondback, along with the addition of the Guidon assets, provides our shareholders with an exciting investment opportunity, now and in the future.

“The large contiguous Tier-1 acreage position in the Northern Midland Basin is expected to lead to operational synergies and deliver capital efficiencies beyond what each company could achieve independently.”

Upon the completion of the transaction, Diamondback stockholders are expected to hold around 92.8% ownership in the combined company, while QEP stockholders will own the remaining 7.2%.

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Free Report
img

2022: So far In Venture Capital

Global investment in 2022 has been majorly dominated by North America, Europe, and Asia Pacific, whereas the Middle East, and South and Central America have recorded low investments comparatively. In light of this, Europe and North America have been identified as the major destinations for Private Equity and Venture Capital (PE/VC) investments.   GlobalData’s whitepaper analyzes which sectors PE/VC firms have been investing in, looking at Technology, Media, and Telecom, with these sectors recording $356 billion and a deal volume of over 10,000 deals in 2022. Healthcare, Financial Services, Business & Consumer Services, and Construction sectors have also seen high investment activity by PE/VC firms, recording a deal value of over $70 billion each.   But what can this mean for you?   Understand how the Deals Database on GlobalData Explorer can be leveraged to:  
  • Track the Aggregate Investment Volumes in PE/VC-Stage firms across geographies and sectors, in addition to viewing the specific deals that drove these volumes
  • Identify the top investors already active in any sector-Geography combinations
  • Assess the Performance of Financial and Legal Advisors, supporting the Dealmaking in any segment of choice (Customizable League tables)
  • Understand what is driving the PE/VC fundraising (Deal Rationale)
  Consult our full report here and optimize your business strategy.
by GlobalData
Enter your details here to receive your free Report.

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