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PE Firm Invests $188MM in Penn Virginia in Exchange for Equity Stake

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   |    Tuesday,November 03,2020

Penn Virginia Corp. has struck an investment deal with Juniper Capital worth $188.4 million.

As part of this, Penn Virginia also concurrently announced a $38.4 million Eagle Ford bolt-on acquisition.

After completion of the deal, Juniper is expected to own ~59% of Penn Virginia’s equity.

Juniper Investment

Juniper will make a $188.4 million investment in Penn Virginia.

• a cash investment of $150 million at $8.75 per share, a 13% premium to the Company’s closing share price on November 2, 2020

• a contribution of complementary oil and gas assets for 4.96 million equity interest in a Penn Virginia subsidiary (in an up-C structure) at the closing price of its common stock on November 2, 2020, representing value of approximately $38.4 million (the purchase price of the Rocky Creek assets)

Debt Reduction / Balance Sheet Improvement

Penn Virginia expects to use $50.0 million of the cash proceeds to pay down and restructure its second-lien term loan (balance of $200.0 million as of October 30, 2020), with the balance of the cash proceeds used to significantly reduce the amount outstanding under the Company’s credit facility (balance of $314.4 million as of October 30, 2020).

The transaction more than doubles the market capitalization of Penn Virginia while paying down over $100 million of debt. The transaction is expected to increase liquidity by approximately 195% to $151 million, reduce the Company’s leverage ratio by approximately 30% to 1.1x, extend the maturity runway for the second-lien term loan by two years to September 2024, and reduce annual interest expense by 20%, or $6 million per year.

Juniper Partner Will Become Chairman of PVC Board

Following the closing, Edward Geiser, Juniper’s Managing Partner, will serve as Penn Virginia's Chairman of the Board.

Additionally, Juniper will appoint four additional members to the Board.

Darrin Henke, Penn Virginia’s President and Chief Executive Officer, and the other members of Penn Virginia’s senior management are expected to continue in their roles, and the Company’s current directors, including Mr. Henke, will remain on the Board immediately following the closing.