Diversified Energy (DEC) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition expands asset base, production density, and commodity mix, adding significant liquids exposure and multi-basin diversification, with entry into the Permian and premier operator status in Western Anadarko Basin.

• Diversifies revenue, basins, and business segments, strengthening presence in Appalachia, Oklahoma, Ark-La-Tex, Permian, Barnett, and Cherokee Play.

• Enhances commodity revenue diversification, supporting LNG exports, premium oil prices, and growing demand from technology and data centers.

• Provides a platform for organic growth through joint ventures, bolt-on acquisitions, and development of undeveloped acreage.

• Partnership with EIG brings a major energy investor as a core shareholder, supporting long-term value creation.

Financial terms and conditions

• Total consideration is approximately $1.275 billion, including assumption of ~$700 million debt, $207 million cash, and 21.2 million new shares valued at ~$345 million, funded by a new $900 million RBL facility.

• Combined entity ownership: 70% existing shareholders, 20% EIG, 10% other Maverick holders; EIG to appoint two of eight directors.

• Acquisition price represents ~3.3x LTM Adjusted EBITDA; Maverick generated ~$380 million adjusted EBITDA (LTM Sep 2024).

• Combined enterprise value is ~$3.8 billion; $50 million break fee payable under certain termination scenarios.

• Transaction expected to close in H1 2025, subject to shareholder and regulatory approval.

Synergies and expected cost savings

• Significant synergy potential from operational and administrative integration, with run-rate operating synergies anticipated in year one, especially in Western Anadarko Basin.

• Expense efficiencies, procurement solutions, and scalable platform expected to drive increased free cash flow and margin improvements.

• Asset density and field operations integration to accelerate synergies via One DEC platform and established integration playbook.

• No specific synergy numbers disclosed yet; focus on supplier, operational, and back-office efficiencies.

• Familiarity with asset base and increased operational density anticipated to drive cost efficiencies.