Nov. 28, 2011 – In the largest leveraged buyout of the year, an investor group led by private equity giant KKR & Co. is to acquire Samson Investment Co. for $7.2 billion. Investors include private equity firms Crestview Partners and Natural Gas Partners as well as Japanese conglomerate Itochu Corporation. KKR is rumored to have taken a 60% stake while Itochu Corp. snagged a 25% piece. The deal is planned to close by the end of the year.
According to the terms of the deal:
- The investor group will acquire all of Samson’s assets excluding the company’s Gulf Coast and deep-water Gulf of Mexico assets, which will be retained by the Schusterman family.
- Samson’s COO, David Adams, will take over as CEO
- Samson Investment Company will be renamed Samson Resources
The transaction adds to KKR’s stockpile of deals in the energy sector within the last few years including a $350 million, 33% stake purchase in East Resources and a $400 million, 40% stake purchase in Hilcorp Resources in 2009 and 2010, respectively. People with knowledge of the matter have said that KKR co-founder Henry Kravis was the main driver in the deal due to his family’s background in the oil industry.
Established in 1971 by petroleum engineer Charles Schusterman, Samson Investment Co. is headquartered in Tulsa, Oklahoma and is one of the largest privately-held oil and natural gas producers in the United States, with interest in more than 12,500 oil producing properties. Currently operating over 4,000 wells, Samson engages in the development, exploration, and production of oil and gas reserves in the US, Canada, Russia, and Venezuela.