The $1.4-billion deal is comprised of $1.23 billion in Vermilion shares plus the assumption of approximately $175 million in debt

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Mario ToneguzziCalgary-based Vermilion Energy Inc. announced on Monday that it was acquiring Spartan Energy Corp., a publicly-traded southeast Saskatchewan oil and gas producer with annual production of approximately 23,000 barrel of oil equivalent per day (91 per cent oil).

Total consideration for Spartan is approximately $1.4 billion, comprised of $1.23 billion in Vermilion shares plus the assumption of approximately $175 million in debt, said the company in a news release.

“Under the terms of the arrangement, Vermilion has agreed to acquire all of the common shares of Spartan issued and outstanding at the effective time of the arrangement. … Spartan shareholders will receive 0.1476 of a Vermilion share for each Spartan common share. Based on Vermilion’s closing price of $44.04 on April 13, 2018, the exchange ratio translates to $6.50 per Spartan common share, representing a five per cent premium to Spartan’s closing price. All of the officers and directors of Spartan have entered into voting support agreements and agreed to vote their Spartan shares in favour of the arrangement. The arrangement includes a reciprocal break fee of $40 million,” said the release.

The deal is expected to close on or about June 15.

Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.


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