US-based oil and natural gas exploration company Diamondback Energy has agreed to acquire Rattler Midstream in an all-stock transaction valued at around $2.2bn.
Under the terms of the acquisition agreement, Rattler shareholders are expected to receive 0.113 shares of Diamondback common stock in exchange for each Rattler share held.
The exchange ratio of the transaction indicates a premium of 17.3% to the closing prices of Rattler’s common share as of 13 May 2022, said the company.
The transaction is expected to be completed in the third quarter of 2022, subject to customary closing conditions.
Diamondback chief executive officer and Rattler general partner Travis Stice said: “The energy landscape has transformed dramatically since Rattler was taken public in 2019, and we believe this agreement to merge companies is in the best interests of both Diamondback and Rattler stakeholders.
“This merger will allow both companies to benefit from the simplicity and scale of the combined entity going forward.”
Diamondback is focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas.
Rattler is a Delaware limited partnership formed by Diamondback that owns crude oil, natural gas, and water-related midstream assets in the Permian Basin.
It provides midstream and energy-related services to Diamondback and other third-party customers, primarily under long-term and fixed-fee contracts.
Diamondback’s wholly-owned subsidiary Diamondback E&P, which holds a majority of Rattler’s outstanding shares, has voted to approve the transaction.
J.P. Morgan Securities served as financial advisor and Akin Gump Strauss Hauer & Feld as legal advisor to Diamondback, while Evercore served as financial advisor and Gibson, Dunn & Crutcher as legal advisor to the Rattler’s Conflicts Committee.
In December 2020, Diamondback Energy entered into an agreement to acquire oil and gas exploration and production firm QEP Resources in an all-stock transaction worth nearly $2.2bn.
