KKR-led consortium bags Samson for $7.2b
A KKR-led consortium, which includes Japan's Itochu Corp, has agreed to buy Samson Investment Co. for $7.2bn in the second largest private equity deal globally this year.
US private-equity firm Crestview Partners and energy investor Natural Gas Partners are also participating in the buyout of one of the largest oil and gas exploration groups in the US. KKR will own 60% of the holding company, acquiring Samson's assets, and Itochu will hold 25%, Reuters reported before the deal was clinched. Sources claim the investors are contributing more than $4 billion in equity.
The auction was run by Jefferies & Co. and JPMorgan arranged the debt package, which is expected to be divided between a $2.35 billion asset-based loan and $2.25 billion of high yield bonds. The debt syndicate comprised of Bank of America Merrill Lynch, Barclays Capital, Bank of Montreal, Citigroup, Credit Suisse, Jefferies, Mizuho, Royal Bank of Canada and Wells Fargo.
Samson - which employs a workforce of almost 1,200 - will now be known as Samson Resources. COO David Adams will be promoted to CEO, replacing Stacy Schusterman, daughter of the firm's founder, Charles Schusterman.
KKR co-founder Henry Kravis confirmed that Samson's headquarters will remain in Tulsa, saying: "For Samson, Tulsa is home. It has always been a Tulsa company, and it will remain a Tulsa company."
The business was founded in 1971. It operates 4,000 wells, has interests in more than 12,500 producing properties, and is comprised of 70% natural gas and 30% oil and liquids. It received legal advice on the deal from Jones Day, while Mizuho, Evercore Partners and Simpson Thacher & Bartlett advised Itochu and Tudor, Pickering, Holt & Co. worked with KKR.
In May, another Asian investor, Richard Ong's RRJ Capital, invested in a US-based oil and gas exploratory firm, Frac Tech. RRJ teamed with Singaporean sovereign wealth fund Temasek Holdings to take a 70% controlling stake in Texas-based Frac Tech, funded by $1.7 billion worth of debt. It has since filed for a listing in the US.
Chesapeake Energy Corporation - a natural gas producer which last year received backing from China Investment Corporation (CIC), the Korea Investment Corporation (KIC), Temasek and Hopu - also boosted its holding in Frac Teck to 30% from 26%.
The largest global PE deal of the year was Blackstone Group's $9 billion buyout of shopping center owner Centro Properties Group in February.
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