Corporate M&A

Pure SPAC and HighPeak Execute Revised Business Combination Agreement

By Deepak Sharma
May 06, 2020
2 minutes read
Laptop Office Hand

Pure Acquisition Corp., a NASDAQ-listed Special Purpose Acquisition Company (SPAC), has entered into a Business Combination Agreement with HighPeak Energy Inc., a wholly-owned subsidiary of Pure formed to effect the business combination, and certain affiliates of HighPeak Energy Partners LP pursuant to which, a wholly-owned subsidiary of HighPeak Energy will merge with and into Pure, with Pure surviving as a wholly-owned subsidiary of HighPeak Energy.

Pure was formed in November 2017 as an energy-focused SPAC, sponsored by Jack D. Hightower and HighPeak Pure Acquisition LLC, an affiliate of HighPeak Energy Partners, and subsequently raised US$414.0 million through an initial public offering in April the following year. Thereafter, in November 2019, Pure and HighPeak Energy Partners had entered into a similar Business Combination Agreement with, amongst others, Grenadier Energy Partners II LLC, a company with assets and operations in the north-eastern part of the Midland basin in Texas. However, that transaction was aborted last month due to prevailing market uncertainties.

Under the terms of the new agreement, a wholly-owned subsidiary of HighPeak Energy will merge with Pure, with Pure surviving as a wholly-owned subsidiary of HighPeak Energy and its existing stockholders receiving one share of common stock of HighPeak Energy for each share of Pure’s common stock owned thereby. HighPeak Energy will then acquire certain assets from HighPeak Energy Partners in exchange for an undisclosed number of shares of its common stock.

After giving effect to the business combination, HighPeak Energy will conduct its business as an independent oil & gas company engaged in the acquisition, development and production of oil, natural gas and NGL reserves, with assets located in the north-eastern part of the Midland basin, Pure said in a statement.

Upon completion of the business combination, HighPeak Energy also intends to list its common stock for trading on the Nasdaq Capital Market under the symbol HPK. Pure’s securities are expected to be delisted at closing of the business combination concurrently with the HighPeak Energy listing.

The business combination was approved and recommended to Pure’s board of directors by a special committee consisting of independent directors. The completion of the transaction remains subject to customary closing conditions, including the approval of Pure’s stockholders, and is expected to be completed in August.

Jefferies is acting as the financial advisor, and Hunton Andrews Kurth LLP is acting as the legal advisor to the special committee of the board of Pure. Vinson & Elkins LLP is acting as the legal counsel to HighPeak Energy Partners.

Share
Select a License
Access our Global Upstream Oil & Gas M&A, Financing and Corporate Database
Quick registration, online payment and instant access