CCMP Invests $325 million in Oklahoma City-based Chaparral

CCMP Capital, a New York-based private equity firm, has invested $325 million in a private business located in Oklahoma City. Chaparral Energy was founded twenty-two years ago by Mark and Chuck Fischer. Messrs. Fischer continue to manage the business as CEO and President, respectively.

CCMP received a 37% common equity interest. One can reasonably extrapolate a valuation of Chaparral in the $1 billion+ range given that the sale was for a non-controlling interest.

The principals of CCMP have invested in Oklahoma before. As managers of JP Morgan Partners they invested (actually provided a part of the initial capitalization for) in Tulsa-based Latigo Petroleum in 2002.  Latigo was sold in 2006 to Pogo Producing Company for approximately $750 million.

According to Chaparral Energy CFO Joe Evans, Capital One SouthCoast and Morgan Stanley assisted Chaparral in securing the equity. The capital will be used to reduce debt and fund future capital expenditures, he explained.

Interestingly, despite that Chaparral Energy is privately held, i.e. its equity is not publicly traded, detailed financial and operational information is available. This is because Chaparral has publicly-traded debt.

---

Written by David L. Perkins, Jr., Managing Director of Tulsa-based Acquisition Advisors and Managing Editor of The Business Owner Journal.

To submit an article or blog post, click here.