Texas Pacific Group Invests $40 Million in Denbury Resources Inc.

Strategic Insights -

Texas Pacific Group, a $720 million private investment partnership, has signed a definitive agreement to invest $40 million in Denbury Resources Inc., a Calgary-based energy exploration and production company. The investment requires regulatory and shareholder approvals and is expected to close next month. Upon completion, Texas Pacific will own approximately 45 percent of the fully-diluted equity in the company, which will be renamed Denbury Resources Inc.

Key Takeaways:

  • Texas Pacific Group signed a definitive agreement to invest $40 million in Denbury Resources Inc. in November 1995.
  • The investment requires regulatory and shareholder approvals and is expected to close next month.
  • Texas Pacific will own approximately 45 percent of the fully-diluted equity in the company after the investment.
  • The company will be renamed Denbury Resources Inc. to reflect the current name of Newscope's wholly-owned U.S. subsidiary.
  • Texas Pacific will receive 8.333 million units comprised of one common share and 0.15 warrant to purchase an additional common share with a combined value of $3 per unit; and 1.5 million convertible preferred shares ($10 par) that can convert into approximately four million shares.
  • The company's chairman, Ronald Greene, will also join the board, and Texas Pacific will have the right to nominate two of the company's six directors.
  • The company intends to use the proceeds from the transaction for ongoing property acquisitions, oil and gas exploration and development activities, and the reduction of bank debt.
  • The investment represents the first of several expected investments by Texas Pacific in the oil and gas industry.
  • Texas Pacific Group of Fort Worth specializes in corporate acquisitions in a wide range of industries, including airlines, healthcare, food, entertainment, telephone, and waste management.

Statistics:

  • $40 million: the amount of investment made by Texas Pacific Group in Denbury Resources Inc.
  • 45 percent: the percentage of fully-diluted equity in Denbury Resources Inc. that Texas Pacific will own after the investment.
  • 8.333 million: the number of units comprised of one common share and 0.15 warrant to purchase an additional common share that Texas Pacific will receive.
  • 1.5 million: the number of convertible preferred shares ($10 par) that Texas Pacific will receive.
  • $3: the combined value of one common share and 0.15 warrant to purchase an additional common share.
  • 4 million: the approximate number of shares that the convertible preferred shares can convert into.
  • 13.86 million: the number of shares currently outstanding in the company.

Sources:

  • Business Wire, November 14, 1995
  • Principal Communications, New York, Owen Blicksilver, 212/546-2240