On January 15, 2024, Talos Energy Inc. announced the execution of definitive agreements to acquire QuarterNorth Energy Inc. for $1.29 billion, signifying a strategic enhancement to Talos’s portfolio in the Gulf of Mexico. The acquisition is structured as a mix of stock and cash, with Talos dispensing approximately $965 million in cash and 24.8 million shares of its common stock. Anticipated to close by the end of Q1 2024, the boards of both companies have unanimously approved the transaction, contingent on customary closing conditions and regulatory approvals. The assets from QuarterNorth are expected to augment Talos’s production by about 30 thousand barrels of oil equivalent per day (MBoe/d) in 2024, contributing to a diverse and robust deepwater operational capability. This transaction is also touted as immediately accretive to Talos shareholders on various financial metrics and strategically meant to accelerate the de-leveraging of the company’s balance sheet. With an expectation of realizing annual run-rate synergies approximating $50 million by the end of 2024, Talos believes that this deal will improve their leverage ratio to 1.0x or less by year-end 2024. The Talos management team, led by President and CEO Timothy S. Duncan, emphasizes that this acquisition aligns with the company’s strategic priorities of maximizing shareholder value through leveraging infrastructure and complementary acreage. Further details provided in the announcement highlight that Talos has secured $650 million in bridge financing from a syndicate of banks and requires further RBL approvals. The governance will see Talos’s Board of Directors expand to include an additional independent director post-transaction. The top equity holders of QuarterNorth, who represent around 68% of the total ownership, have agreed to support the transaction and will be subject to a customary lock-up arrangement for 60 days following closing. Talos has engaged PJT Partners and Greenhill (Mizuho Securities M&A) as lead financial advisors among other advisory and legal support from J.P. Morgan Securities LLC, Akin Gump Strauss Hauer & Feld LLP, Barclays, and Holland & Knight LLP.
“Oil & Gas Exploration and Production”, “Financial Services”,”United States Gulf of Mexico”, “Houston, Texas, United States”
https://mergersacquisitions.einnews.com/article/681507949/QadYstgvBRN5DDDS?ref=rss&ecode=Q1vNcweEggLWKz7L