Vermilion acquires Spartan Energy for $1.4B in all-stock deal
Vermilion Energy (VET.TO) announced on Monday it is buying Spartan Energy (SPE.TO) in a friendly takeover that will expands its reach in Saskatchewan.
Under the terms of the agreement, Spartan shareholders will receive 0.1476 of a Vermilion share for each of their shares.
Based on Friday’s closing prices, the offer represents a five-per-cent premium for Spartan shareholders and values the company at $1.23 billion. Once debt is taken into account, the transaction is worth $1.4 billion.
The deal values Spartan at $1.23 billion. Once debt is taken into account, the transaction is worth $1.4 billion.
Vermilion pointed out in a release that it expanded into southeast Saskatchewan in 2014 and has “continuously evaluated opportunities” to broaden its footprint in the province. The vast majority of Spartan’s assets are in Saskatchewan, and the company’s total production this year is expected to be 23,000 barrels of oil equivalent per day.
Vermilion said it’s raising its 2018 production forecast to a range of 86,000 to 90,000 boe/d from as much as 77,500 boe/d previously. The company also boosted its capital budget to $430 million from $325 million.
The takeover still requires standard regulatory and shareholder approval and is expected to close around June 15. The agreement also allows for a $40-million break fee if either side walks away from the deal.
TD Securities, GMP FirstEnergy and Peters & Co. provided advice to Spartan on the deal.