Diamondback announces Drop Down transaction valued at $4.45B with Viper

Diamondback Energy (FANG) announced that it has entered into a definitive purchase agreement with Viper Energy (VNOM) , a subsidiary of Diamondback, to sell certain mineral and royalty interests from subsidiaries of Diamondback for $1B in cash and approximately 69.6M units of Viper’s operating subsidiary in a drop down transactio The tax advantaged OpCo units, which will be issued together with an equal number of shares of Class B common stock of Viper, are exchangeable for shares of Class A common stock of Viper. Based on the volume weighted average sales price of Viper’s common stock for the 30-trading day period ending on January 24 of $49.55, the transaction is valued at a total of $4.45B . Viper expects to fund the cash portion of this transaction through a combination of cash on hand, borrowings under Viper’s credit facility, and proceeds from one or more capital markets transactions, subject to market conditions and other factors.