Range Resources (NYSE:RRC) agrees to acquire Memorial Resource Development (NASDAQ:MRD) in a deal valued at $4.4B including $1.1B of debt. This valuation includes the assumption of MRD’s net debt, which was $1.1 billion as of March 31, 2016.
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The all-stock deal is valued at $15.75 per share, a 17% premium to Memorial Resource Development’s Friday close.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. Range is headquartered in Fort Worth and is a natural gas, natural gas liquids and oil company.
The combination – one of few US energy mergers during the market rout – will give Range access to gas and oil properties in north Louisiana, adding to its operations in Oklahoma, Pennsylvania and Texas.
The deal will markedly add to Range’s cash-flows and improve its bottom line, while improving its credit profile.
Jeff Ventura, Range’s CEO, said, ‘This is an exciting announcement that brings together two high-quality unconventional producers with large de-risked, high-return projects into one portfolio.
Shares of Range Resources are tumbling 7.9% to $38.69 on Monday afternoon.
Memorial Resource Development’s shareholders will receive 0.375 of a Range share for each share they hold, Kallanish Energy understands.
Memorial’s shareholders are expected to own about 31 percent of Range Resources after the close of the deal in the second half of the year. The transaction zeros out Memorial Resource’s interest in Memorial Production’s outstanding common units, incentive distribution rights or general partner interest.
The boards of directors of both companies have unanimously approved the terms of the agreement, and have recommended that both shareholder groups approve the transaction, according to a news release. The transaction is still subject to the approval of the respective companies’ shareholders, customary closing conditions, and certain regulatory approvals.
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Morgan Stanley and Barclays Capital were Memorial’s financial advisers and Vinson & Elkins and Akin Gump were its legal advisers.
