Crescent Energy Company and SilverBow Resources, Inc. have announced a definitive agreement under which Crescent will acquire SilverBow in a transaction valued at $2.1 billion. This merger aims to create a scaled company with a balanced portfolio of high-quality, long-life assets, an attractive returns-driven financial framework, and a strong balance sheet. The combined entity will be led by a management team and Board with significant operating and investing expertise, positioning it for long-term growth and value creation.
Under the terms of the agreement, SilverBow shareholders will receive 3.125 shares of Crescent Class A common stock for each share of SilverBow common stock. They also have the option to receive all or a portion of the proceeds in cash at a value of $38 per share, subject to possible proration, with a maximum total cash consideration of $400 million.
Transaction Highlights
- High-Quality Asset Portfolio: The merger creates the second-largest operator in the Eagle Ford, with a broader portfolio of approximately 250 Mboe/d of low-decline, long-life production and a deep, high-quality inventory supporting compelling returns through market cycles.
- Free Cash Flow and Capital Allocation: The combined company’s asset profile is expected to generate substantial free cash flow, governed by disciplined, investor-first capital allocation. This includes a strong balance sheet and a peer-leading return of capital framework, featuring a fixed dividend and stock buyback program.
- Cost Savings and Efficiencies: The complementary assets and scaled enterprise advantages are anticipated to drive significant annual synergies of $65 to $100 million through immediate cost of capital savings and operating efficiencies.
- Strategic Growth Platform: The combined company will have the expertise, balance sheet strength, and capital markets access necessary to execute Crescent’s strategy of free cash flow and prudent growth through disciplined, returns-driven M&A.
John Goff, Crescent’s Chairman of the Board, described the transaction as “a compelling transaction for shareholders of both companies, creating a premier growth through acquisition platform.” He expressed excitement about the future potential of the combined entity, emphasizing Crescent’s enhanced position as a leading growth business.
Crescent CEO David Rockecharlie highlighted that the combination with SilverBow is expected to be immediately accretive to all key per share metrics, solidifying Crescent as a leading operator in the Eagle Ford and strengthening its growth platform with increased scale. He noted that SilverBow’s high-quality position in the Eagle Ford complements Crescent’s portfolio, offering a unique value proposition in the evolving sector.
SilverBow CEO Sean Woolverton added that the transaction represents an exciting new chapter for SilverBow, providing an attractive premium to shareholders and a choice between significant upside potential through Crescent shares or immediate cash liquidity. He praised the SilverBow team for their hard work and dedication, which has led to this strategic combination.
Transaction Details
SilverBow shareholders who elect to receive stock will receive 3.125 shares of Crescent Class A common stock for each share of SilverBow common stock. The transaction is structured as a cash-election merger, with shareholders able to elect to receive $38 per share in cash up to a maximum total cash consideration of $400 million. If aggregate cash elections exceed this amount, shareholders electing cash will receive a mix of cash and stock to limit total transaction cash consideration. Post-transaction, Crescent shareholders will own approximately 69 percent to 79 percent, and SilverBow shareholders will own approximately 21 percent to 31 percent of the combined company, depending on the final cash consideration at closing.
Timing and Approvals
The boards of directors of both companies have unanimously approved the transaction. A special committee of independent directors of Crescent has also unanimously approved it. Crescent shareholders representing ~43 percent of total Class A and Class B common stock have entered into voting agreements supporting the transaction. Subject to customary closing conditions, including shareholder and regulatory approvals, the transaction is expected to close by the end of the third quarter of this year.
Governance
Post-close, the Crescent board of directors will increase to 11 members with the addition of 2 directors designated by SilverBow. John Goff will continue as non-executive chairman, and David Rockecharlie will remain CEO of the combined company. Crescent will maintain its headquarters in Houston.
Advisors
Jefferies LLC and Wells Fargo serve as Crescent’s financial advisors, with Vinson & Elkins LLP as legal counsel. Wells Fargo Bank, NA has provided $2.0 billion in committed financing for the transaction. The Special Committee retained Intrepid Partners, LLC as financial advisor and Richards, Layton & Finger LLP as counsel. SilverBow’s financial advisors are BofA Securities, Inc. and Evercore, with Gibson, Dunn & Crutcher LLP as legal counsel.
For more information visit www.crescentenergyco.com
