Kimmeridge-backed Sitio and Brigham to merge amid rising oil prices; Thoma Bravo opens London office

Sitio and Brigham are merging for about $4.8 billion.

Good morning, Hubsters.

Welcome back to the working week after a long Labor Day weekend. MK Flynn here with today’s Wire.

There’s big news for the oil and gas industry, which has been profiting this year from rising oil prices.

Sitio Royalties and Brigham Minerals just announced that they have agreed to combine in an all-stock merger, with an aggregate enterprise value of approximately $4.8 billion, based on the closing share prices of the companies on Friday.

“We believe that achieving material scale in this industry is critical to creating sustained value for our stakeholders and distinguishing Sitio from others, which is why we have been so focused on employing a differentiated, large-scale consolidation strategy,” said Chris Conoscenti, CEO of Sitio, in a statement.
“Our combined company will be the largest publicly traded mineral and royalty company in the US by enterprise value that is focused on consolidation across a diverse set of operators and geographies. We will be able to pursue opportunities that few others can because of the size of our business, strength of our balance sheet, optimized cost structure and access to capital.”

The current Sitio management team will run the combined company, which will keep the Sitio Royalties Corp. company name.

Sitio is backed by Kimmeridge, a New York PE firm that invests in energy. Kimmeridge partner Noam Lockshin, who is the current chairman of Sitio’s board, will serve as chairman of the combined company.

Kimmeridge has already raised more than $500 million for its Kimmeridge Energy Engagement Partners II, which has a hard cap of $1 billion, Buyouts’ Kirk Falconer reported in July.

For more on Kimmeridge, see PE Hub’s Obey Martin Manayiti’s conversation with firm co-founder Ben Dell earlier this year about Kimmeridge’s efforts to accelerate carbon neutrality by developing environmentally responsible, low-cost energy assets.
Business plan. A new prime minister for the UK may bode well for private equity and M&A, as PE Hub Europe editor Craig McGlashan writes in today’s Dealflow.

Now that Liz Truss has been confirmed the leader of the Conservative Party and has met with the Queen, businesses may welcome the clarity, said Merlin Piscitelli, EMEA head at M&A technology provider Datasite, in a statement.

“Addressing the cost-of-living and boosting the economy will continue to be top priorities,” said Piscitelli. “But now that we have a new leader, businesses can plan with better clarity. This may include investing to scale, which could signal more mergers and acquisitions in the pipeline.”

Piscitelli pointed to a survey Datasite conducted in June of 100 UK M&A professionals that found 71 percent expected volumes to rise over the next 12 months.

“Of course, increased activity will likely be dependent on how quickly effective measures to address energy concerns and the looming threat of recession are activated,” added Piscitelli. “M&A may also take longer as dealmakers assess the risks of current market uncertainty and changing valuations.”

European expansion. One PE firm betting on more dealmaking in Europe is Thoma Bravo, as we’ve been reporting for a while. Today, the news is official: the firm is expanding its presence internationally with the opening of an office in London. The new office joins the firm’s existing offices in San Francisco, Chicago and Miami, each of which have “recently experienced tremendous growth,” according to the press release.

“Europe is a critical market for the growth of Thoma Bravo, and the launch of a London office represents a significant step forward in our ability to partner with some of the best software companies in the world as we continue to extend our investment strategy globally,” said Orlando Bravo, a founder and managing partner.

Irina Hemmers is joining the firm to lead the London office. She hails from Inflexion Private Equity, where she led the technology investment team. Prior to that, she was a partner at Apax Partners. Hemmers holds a BA in business administration and management from Tulane University, a master’s degree in international economic and business studies from Leopold-Franzens Universität Innsbruck and an MPA in economics from Harvard Kennedy School.

First timers. First-time fundraising marches on despite massive headwinds, and our colleagues at Buyouts have built a home-grown database of 35 funds (and growing) in the market, how much they’ve raised, what they’re targeting, what their strategies are and who runs them.

Buyouts tracks first-time fundraising through sources and official documentation (if it exists). The list is always growing, and it’s just been updated with some new names.

New additions include Nexa Equity, launched by ex-Insight Partners executive Vlad Besprozvany for software investments; Marlinspike Partners, led by Neil Keegan and Mislav Tolusic for investments in “dual-use” tech with government and private industry applications; and Sandbrook Capital, targeting $1 billion for investments into energy transition.

Check out the database here.

That’s all for now. Buyouts’ Chris Witkowsky will have more tomorrow, and I’ll be back on the Wire on Thursday.

Happy dealmaking until then,