Daily News: May 29, 2018

Frost Agents $200MM Revolver to Support Kimbell Haymaker Buy


Kimbell Royalty Partners acquired mineral and royalty interests held by Haymaker Minerals & Royalties and Haymaker Resources for $404 million. Frost Bank served as administrative agent for a $200 million revolving credit facility to support the transaction. Wells Fargo and Credit Suisse were members of the lender group.

The borrowing base of Kimbell’s current revolving credit facility is $100 million, which will increase to $200 million upon closing of the acquisition. At the closing, the company will have approximately $64 million of availability under its new revolver, providing for significant liquidity.

Following the closing of the acquisition, Haymaker’s private equity sponsors, KKR and Kayne Anderson Capital Advisors, along with Haymaker management, will collectively own approximately 37% of the then outstanding common units of Kimbell.

“This is a transformative acquisition for our company which we expect to deliver significant value and benefits through both increased scale and significant operating leverage that will drive improved profitability. Through this combination of highly complementary minerals portfolios, Kimbell is uniquely positioned to be a major participant in the best-performing, highest-growth oil and gas basins in the Lower 48,” said Bob Ravnaas, chairman and CEO of Kimbell.

Karl Brensike, CEO of Haymaker, said, “We are extremely proud of the Haymaker team for assembling this world-class portfolio. Diversified minerals and royalties are just starting to get the recognition they deserve as a lower risk strategy to capitalize on the tremendous advancements being made in the U.S.

Kimbell’s management team, led by Ravnaas, will operate the combined company following the closing.

Credit Suisse Securities acted as exclusive financial advisor and sole placement agent on the series A preferred units to Kimbell and Baker Botts acted as legal counsel to Kimbell. UBS Investment Bank acted as exclusive capital markets advisor to Kimbell in connection with the election to change to a taxable entity. RBC Richardson Barr acted as exclusive financial advisor to Haymaker, Kirkland & Ellis acted as legal counsel to KKR and Haymaker, and DLA Piper acted as legal counsel to Kayne and Haymaker. Kirkland & Ellis also represented Apollo in connection with the series A preferred units.