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Sitio Royalties Corp. (NYSE:STR), a company that InvestingPro data shows has maintained impressive gross profit margins of 92.28% and generated $512.12M in EBITDA over the last twelve months, announced Tuesday that it has completed its all-equity merger with Viper Energy (NASDAQ:VNOM), Inc., resulting in Sitio becoming a wholly owned subsidiary of the newly named Viper Energy, Inc. According to InvestingPro’s Fair Value analysis, Sitio was slightly undervalued before the merger. The transaction was finalized following shareholder approval at a special meeting held Monday and the satisfaction of all closing conditions outlined in the merger agreement.
Under the terms of the merger, each share of Sitio Class A common stock was converted into the right to receive 0.4855 shares of New Viper Class A common stock. Sitio stockholders now own approximately 20% of the outstanding shares of New Viper common stock, while former Viper stockholders hold approximately 80%. Prior to the merger, Sitio maintained a strong financial position with a current ratio of 4.04 and offered shareholders a significant dividend yield of 7.95%. No fractional shares were issued; holders received cash in lieu of fractional shares based on prevailing market prices.
As part of the merger process, Sitio notified the New York Stock Exchange that trading in its Class A common stock would be suspended prior to Tuesday’s market open. A Form 25 was filed with the Securities and Exchange Commission to delist Sitio’s shares and remove them from registration under Section 12(b) of the Securities Exchange Act. The company also intends to file a Form 15 to suspend its reporting obligations under the Exchange Act.
In connection with the transaction, all outstanding indebtedness under Sitio’s revolving credit facility was repaid in full and all commitments terminated. Additionally, Sitio Opco and Sitio Finance Corp. redeemed all $600 million aggregate principal amount of their 7.875% Senior Notes due 2028 at the applicable redemption price, including accrued and unpaid interest.
Following the merger, Sitio’s board of directors and certain executive officers departed, with new directors and officers appointed in accordance with the merger agreement. The company’s certificate of incorporation and bylaws were also amended and restated.
The information in this article is based on a press release statement and a filing with the Securities and Exchange Commission. For deeper insights into company valuations and financial metrics, InvestingPro subscribers have access to over 30 additional key metrics and exclusive ProTips, along with comprehensive Pro Research Reports covering 1,400+ top US stocks.
In other recent news, Sitio Royalties Corp. shareholders have approved a merger with Viper Energy, Inc., which is set to close on August 19, 2025. The merger agreement specifies that Sitio stockholders will receive shares of New Cobra Pubco, Inc., while Operating Partnership unitholders will receive shares and units of Viper Energy Partners LLC. This transaction, valued at approximately $4.1 billion, includes Sitio’s net debt of about $1.1 billion as of March 31, 2025. Analysts at Texas Capital Securities downgraded Sitio Royalties’ stock rating from Buy to Hold following the merger announcement. They noted the strategic fit and potential benefits of the merger, which is expected to create a significant player in the minerals sector with substantial scale and low leverage. The acquisition will see Viper acquiring approximately 25,300 net royalty acres in the Permian Basin from Sitio. Additionally, Viper’s board has approved a 10% increase in its base dividend, now set at $1.32 per share annually, indicating confidence in the merger’s potential to enhance shareholder value.
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