Diversified Energy Company (NYSE: DEC, LSE: DEC) has agreed to acquire Birch Permian Holdings and affiliated companies for approximately $1.8 billion, its largest transaction in 25 years.
The deal is expected to lift production by roughly 35% and adjusted EBITDA by roughly 55%, taking pro forma gross volumes under Diversified's operated control to approximately 2.5 billion cubic feet equivalent per day.
Birch produces roughly 68,000 barrels of oil equivalent per day net from 480 net wells across roughly 46,000 net mineral acres in the Permian Basin, with reserves of approximately 1,168 billion cubic feet equivalent and a PV-10 value of roughly $2.0 billion.
The purchase price implies a multiple of approximately 3.3 times adjusted EBITDA, with the assets expected to deliver roughly 80% EBITDA margins and add approximately $548 million of annualised adjusted EBITDA.
Diversified will fund the acquisition primarily through a $1.5 billion asset-backed securitisation structured with Carlyle, alongside existing revolving credit facility liquidity.
Carlyle and Diversified have also expanded their strategic partnership from an original $2 billion framework to pursue up to $10 billion in future PDP acquisition opportunities.
"This transaction will establish Diversified as a scaled operator in the nation's most important oil-producing basin and creates a strategic position from which we can pursue future consolidation opportunities across the Permian Basin," said Chairman and CEO Rusty Hutson, Jr.
The acquisition carries a $50 million break fee and remains subject to customary closing conditions, including regulatory approvals, with completion expected during the fourth quarter of 2026.