Take Private: Warburg’s Citizen plans to acquire Roan Resources for $1bn

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[Context: On October 1, Warburg Pincus-backed Citizen Energy announced agreement to acquire Roan Resources (NYSE: ROAN) for $1bn, inlcuding $780m of net debt. Further details, advisors and related links are below.]


Roan Resources Enters Into Definitive Merger Agreement to Be Acquired by Citizen Energy; Roan Resources stockholders to receive $1.52 in cash per share of common stock; Sale Follows Comprehensive Review of Strategic Alternatives; Announce Rick Gideon as Chief Executive Officer

OKLAHOMA CITY–October 01, 2019–(BUSINESS WIRE)–Roan Resources, Inc. (NYSE: ROAN) (“Roan” or the “Company”) today announced that it has entered into a definitive merger agreement to be acquired by Citizen Energy Operating, LLC (“Citizen Energy”), an affiliate of Warburg Pincus LLC (“Warburg Pincus”), in an all-cash transaction valued at approximately $1.0 billion, including Roan’s funded net debt of approximately $780 million as of September 30, 2019. The transaction is expected to be completed during the fourth quarter of 2019 or the first quarter of 2020, subject to Roan stockholder approval, regulatory approvals and the satisfaction of other customary closing conditions.

Under the terms of the merger agreement, which has been unanimously approved by Roan’s Board of Directors, Roan stockholders will receive $1.52 in cash for each share of Roan common stock they own. The all-cash purchase price represents a premium of approximately 24% over the closing price of Company shares as of September 30, 2019.

“We are pleased to reach this agreement with Citizen Energy,” said Joseph A. Mills, Roan’s Executive Chairman of the Board. “This transaction is the culmination of our Board’s extensive review of strategic alternatives to maximize value for our stockholders, including a comprehensive process during which we engaged with a considerable number of counterparties. Ultimately, the Board unanimously determined that an all-cash transaction with Citizen Energy is in the best interests of our stockholders and the Company and will deliver value to our stockholders at a premium to our recent share price.”

Additionally, Roan today announced the appointment of Rick Gideon as its Chief Executive Officer, who will assume his new responsibilities immediately. Mr. Gideon has over 20 years of executive and industry experience at a number of large, publicly held exploration and production companies. Mr. Gideon previously served as Senior Vice President of US Operations at Devon Energy Corporation for four years. Prior to his time at Devon Energy Corporation, Mr. Gideon was the General Manager of the Mid-Continent Region and Drilling & Completions for HighMount Exploration & Production, LLC for six years. Prior to that, Mr. Gideon held senior positions at Linn Energy, Inc. and Dominion Energy, Inc.

“We are very pleased to bring Rick onboard to see the Company through the closing process,” said Mr. Mills. “His leadership and focus will be important during the transition of the business.”

Roan has also elected to temporarily reduce its drilling and development activity and to suspend all completion activity. This reduction in activity is to allow Mr. Gideon time to assess the Company’s overall operations plan. As a result of this change, investors should no longer rely on the guidance provided by the Company on its last quarterly investor call, and Roan does not expect to otherwise update or provide further guidance.

Fully committed debt financing for the transaction will be provided by JPMorgan Chase Bank, N.A., BMO Harris Bank N.A., The Toronto Dominion Bank, New York Branch and BofA Merrill Lynch. Equity financing will be provided by investment funds affiliated with Warburg Pincus and Citizen Energy.

Citi and Jefferies LLC are serving as financial advisors to Roan, and Vinson & Elkins LLP is serving as its legal counsel. BofA Merrill Lynch is serving as financial advisor to Citizen Energy and Latham & Watkins LLP is serving as its legal counsel.

About Roan Resources

Roan is an independent oil and natural gas company headquartered in Oklahoma City, OK focused on the development, exploration and acquisition of unconventional oil and natural gas reserves in the Merge, SCOOP and STACK plays of the Anadarko Basin in Oklahoma.

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