Desert Peak Minerals’ $1.9 Billion Merger With Falcon Minerals Corporation

Latham & Watkins advised Falcon, and White & Case advised the Transaction Committee. Vinson & Elkins represented Desert Peak and Kimmeridge. Kirkland & Ellis counseled Blackstone in the transaction.

Desert Peak Minerals (“Desert Peak”) and Falcon Minerals Corporation (NASDAQ: FLMN, FLMNW) (“Falcon”) have entered into a definitive agreement to combine in an all-stock transaction which values the combined enterprise at $1.9 billion. The combination is expected to create a premier mineral and royalty company at the front end of operators’ cost curves, with low leverage, an emphasis on shareholder returns and a significant footprint in the Permian Basin and Eagle Ford.

The combined company will remain focused on consolidating high-quality mineral and royalty positions in the Permian Basin while optimizing its existing asset base. It is positioned to become a leading consolidator in the space through increased scale and an experienced Board of Directors and management team with a track record of consummating large, accretive acquisitions.

The transaction is expected to close in the second quarter of 2022, subject to the approval of Falcon shareholders, certain regulatory approvals and satisfaction of other customary closing conditions. Blackstone, which currently owns 40.6% of the voting power of Falcon, has entered into a support agreement obligating it to vote in favor of the transaction.

Desert Peak was founded by Kimmeridge, a private investment firm focused on energy solutions, to acquire, own and manage high-quality Permian Basin mineral and royalty interests with the objective of generating cash flow from operations that can be returned to shareholders and reinvested.

Falcon is an Up-C-Corporation formed to own and acquire high-quality, oil-weighted mineral rights. Falcon owns mineral, royalty, and over-riding royalty interests covering over 21,000 NRAs in the Eagle Ford Shale and Austin Chalk in Karnes, DeWitt, and Gonzales Counties in Texas. The Company also owns over 12,000 NRAs in the Marcellus Shale across Pennsylvania, Ohio, and West Virginia.

Blackstone is a leading global investment business investing capital on behalf of pension funds, large institutions and individuals.

Latham & Watkins represented Falcon Minerals in the transaction with a corporate deal team led by Houston partners Nick Dhesi (Picture) and Ryan Lynch and Houston/Austin partner Bill Finnegan, with associates Clayton Heery, Kate Wang, Michael Basist, Ziyad Barghouthy, and Janhavi Das. Advice was also provided on tax matters by Houston partners Tim Fenn and Bryant Lee, with associate Emily Fawcett; on finance matters by Houston partner Matthew Jones, with associate Chris Wood; on intellectual property matters by New York partner Jeffrey Tochner, with associate Sebastian Moss; on antitrust matters by Washington, D.C. partner Jason Cruise and counsel Peter Todaro, with associate Alexandra Clark; on environmental matters by Houston partner Joel Mack and Los Angeles counsel Josh Marnitz; on oil and gas related matters by Houston partner Stephen Szalkowski; and on benefits and compensation matters by Washington, D.C. partner Adam Kestenbaum.

The White & Case team was led by partner Steven Tredennick (M&A) in Houston, and included partner Chang-Do Gong and associate Samantha Kobbe (both M&A) in New York, partner Laura Katherine Mann and associates Fatima Hassan Ali (both Capital Markets) and Mary Johnson (M&A), partner Chad McCormick and associate Neil Clausen (both Tax) in Houston.

The Kirkland team was led by M&A partners Rhett Van Syoc, Doug Bacon, Debbie Yee, David Thompson, and Randy Santa Ana; and capital markets partners Michael Rigdon and Atma Kabad and associate Shelby Brown.

The V&E corporate team was led by partners Doug McWilliams, Scott Rubinsky and Benji Barron and senior associate Sang Lee, with assistance from counsel Raleigh Wolfe and associates David Smith, Nate Richards and Joseph Steuert. Also advising were partners Jim Meyer and Ryan Carney and associate Jeff Slusher; counsel Dario Mendoza and associate Brian DeShannon; partner Sean Becker and counsel Martin Luff; counsel Rajesh Patel and associate Marcus Martinez; partner Bryan Loocke, counsel Joclynn Townsend and associate Ben Zeter; partner Matthew Dobbins; and partner Hill Wellford and counsel David Smith.

Involved fees earner: Douglas Bacon – Kirkland & EllisShelby Brown – Kirkland & EllisAtma Kabad – Kirkland & EllisMichael Rigdon – Kirkland & EllisRandy Santa Ana – Kirkland & EllisDavid Thompson – Kirkland & EllisRhett Van Syoc – Kirkland & EllisDebbie Yee – Kirkland & EllisZiyad Barghouthy – Latham & WatkinsMichael Basist – Latham & WatkinsAlexandra Clark – Latham & WatkinsJason Cruise – Latham & WatkinsJanhavi Das – Latham & WatkinsNick Dhesi – Latham & WatkinsEmily Fawcett – Latham & WatkinsTimothy Fenn – Latham & WatkinsWilliam Finnegan – Latham & WatkinsClayton Heery – Latham & WatkinsMatthew Jones – Latham & WatkinsAdam Kestenbaum – Latham & WatkinsBryant Lee – Latham & WatkinsRyan Lynch – Latham & WatkinsJoel Mack – Latham & WatkinsJoshua Marnitz – Latham & WatkinsSebastian Moss – Latham & WatkinsStephen Szalkowski – Latham & WatkinsJeffrey Tochner – Latham & WatkinsPeter Todaro – Latham & WatkinsKate Wang – Latham & WatkinsChristopher Wood – Latham & WatkinsBenji Barron – Vinson & Elkins LLPSean Becker – Vinson & Elkins LLPRyan Carney – Vinson & Elkins LLPBrian DeShannon – Vinson & Elkins LLPMatthew Dobbins – Vinson & Elkins LLPSang Hun Lee – Vinson & Elkins LLPMarcus Lind-Martinez – Vinson & Elkins LLPBryan Loocke – Vinson & Elkins LLPMartin Luff – Vinson & Elkins LLPDouglas McWilliams – Vinson & Elkins LLPDario Mendoza – Vinson & Elkins LLPJames Meyer – Vinson & Elkins LLPRajesh Patel – Vinson & Elkins LLPNathaniel Richards – Vinson & Elkins LLPScott Rubinsky – Vinson & Elkins LLPJeff Slusher – Vinson & Elkins LLPDavid Smith – Vinson & Elkins LLPJoseph Steuert – Vinson & Elkins LLPJoclynn Townsend – Vinson & Elkins LLPHill Wellford – Vinson & Elkins LLPRaleigh Wolfe – Vinson & Elkins LLPBenjamin Zeter – Vinson & Elkins LLPNeil Clausen – White & CaseChang-Do Gong – White & CaseFatima Hassan Ali – White & CaseLaura Katherine Mann – White & CaseChad McCormick – White & CaseSteven Tredennick – White & Case;

Law Firms: Kirkland & EllisLatham & WatkinsVinson & Elkins LLPWhite & Case;

Clients: BlackstoneDesert Peak MineralsFalcon MineralsFalcon Minerals – Transaction Committee;