Diversified Energy Company (DEC) has entered into a definitive agreement to acquire Birch Permian Holdings, Inc. for approximately $1.8 billion. This strategic acquisition establishes a scaled, operated position for Diversified in the Permian Basin and is expected to increase the company's production by approximately 35% and Adjusted EBITDA by approximately 55%. The deal is the largest in the company's history.
Key Details
- Acquisition Terms: The gross purchase price is ~$1.8 billion, implying a multiple of ~3.3x annualized Adjusted EBITDA. The transaction is expected to close in the fourth quarter of 2026.
- Financial Impact: The acquisition is expected to be immediately accretive, adding an estimated $548 million in annualized Adjusted EBITDA. The acquired assets have an ~80% EBITDA margin.
- Acquired Assets: The deal includes current net production of ~68 Mboepd (409 MMcfepd), ~1,168 Bcfe of proved reserves, 480 net wells, and integrated midstream and water infrastructure in the Permian Basin.
- Financing: The acquisition will be primarily funded through a $1.5 billion asset-backed securitization arranged in partnership with Carlyle, supplemented by existing liquidity.
- Expanded Partnership: Diversified and Carlyle have also expanded their strategic partnership, agreeing to pursue up to $10 billion in future acquisition opportunities.