In an all-stock deal valued at $3.1 billion, Crescent Energy has agreed to acquire Vital Energy, its Tulsa-based rival in the Permian Basin.
Under the terms of the agreement, Vital shareholders will receive 1.9062 shares of Crescent Class A common stock for each share of Vital common stock. After closing, Crescent shareholders will own approximately 77 percent of the combined company, with Vital shareholders owning 23 percent. The valuation represents a 15 percent premium to Vital’s 30-day volume-weighted average price as of Aug. 22.
Kirkland & Ellis is outside legal counsel to Crescent and Vinson & Elkins is advising Vital.
And the deal was a V&E reunion of sorts, as both GCs at the two companies involved in the deal spent time at the firm, even though they never overlapped. Bo Shi is Crescent’s general counsel and corporate secretary, a role he has held since December 2021. Before that, he was with V&E for seven years as an associate in the firm’s Houston office, from 2014 to 2021. Mark Denny, Vital’s GC, was an associate V&E for nearly two years, from 2008 to 2010.
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Crescent will remain headquartered in Houston, with its board expanding to accommodate two directors selected by Vital. David Rockecharlie will continue to serve as Crescent CEO.
“With this acquisition and our $1 billion non-core divestiture pipeline, we are better positioned than ever before,” said Rockecharlie in the firm’s announcement. It also makes Crescent one of the 10 largest independent producers, with an extensive portfolio of assets in the Permian, Eagle Ford and Uinta Basins.
Jefferies is financial advisor to Crescent while Houlihan Lokey and J.P. Morgan are jointly advising Vital.
Intrepid Partners was financial advisor to the special committee, with Richards, Layton & Finger as the committee’s outside legal counsel.
The V&E team advising Vital was led from Houston by partners Doug McWilliams, Lande Spottswood and Thomas Zentner, assisted by associates Chase Browndorf, Michelle Yang, Lauren Perillo, Graham Buck, and Tate Shaw.
Also advising were partners Lina Dimachkieh and Brian Russell and associates Katie Dillard and Patrick Darby on taxes; partner David D’Alessandro, counsel Regina Ibarra and associate Reagan Gregory on compensation; partner Sean Becker and associate Andrew Cox on labor issues; partner Darin Schultz on finance; partner Matt Dobbins and senior associate Kelly Rondinelli on environmental matters; partner Bryan Loocke on corporate; partners David Stone and Jackson O’ Maley on capital markets; and partners Hill Wellford and Evan Miller and associate Adam Thomas on antitrust.
Gibson Dunn & Crutcher advised Houlihan Lokey with a team also led from Houston by partner Hillary Holmes, along with associates Ashley Whittington and Mariana Lozano.
The Kirkland team advising Crescent was led from Houston by partners Doug Bacon and Kyle Watson along with Gabrielle Sumich, Evan Chavez and Clare Brast.
The team also included real assets lawyers David Castro, Christopher Heasley and Shawn Beloin; executive compensation lawyers Stephen Jacobson and Brandon Newman; capital markets lawyers Matt Pacey, Anthony Sanderson and Billy Vranish; debt finance lawyers Lucas Spivey, Jordan Roberts and Michelle Williamson; and tax lawyers Mark Dundon and Joe Tobias.