The company owns EP Minerals, which specialises in producing products derived from diatomaceous earth, perlite, engineered clays, and non-activated clays, and SandBox Logistics, a provider of proppant storage, handling, and well-site delivery solutions
U.S. Silica to be acquired by funds managed by Apollo Funds. (Credit: tzevena from Pixabay)
U.S. Silica, a producer of commercial silica for the oil and gas industry, has agreed to go private in a deal worth around $1.85bn with funds managed by affiliates of alternative asset manager Apollo (Apollo Funds).
As per the terms of the deal, shareholders of the New York Stock Exchange (NYSE)-listed U.S. Silica will be paid $15.5 per share in cash as consideration.
The price per share represents an 18.7% premium over U.S. Silica’s closing share price of $13.06 on 25 April 2024, which was the last full trading day before the announcement of the transaction. It also signifies a 33% premium over the company’s 90-day volume-weighted average share price ending on 25 April 2024.
Based in Texas, U.S. Silica owns EP Minerals and SandBox Logistics as wholly-owned subsidiaries.
EP Minerals specialises in producing products derived from diatomaceous earth, perlite, engineered clays, and non-activated clays.
SandBox Logistics is a provider of proppant storage, handling, and well-site delivery solutions.
U.S. Silica operates 26 mines and processing facilities, along with two exploration stage properties spread across the US.
Apollo partner Gareth Turner said: “We have tremendous respect for U.S. Silica and its talented management team and employees and are thrilled to partner with them to unlock the Company’s next phase of growth.
“U.S. Silica’s industrial minerals and sand mining and logistics businesses each are proven leaders in their respective markets. We believe there are many opportunities to grow and expand these businesses and we look forward to using our significant industry experience to build on and extend the Company’s legacy of excellence to new frontiers.”
Following the transaction’s conclusion, U.S. Silica’s common stock will cease to be listed on the NYSE. However, the company will persist under the U.S. Silica name and brand, with CEO Bryan Shinn and the existing executive team at the helm.
Shinn said: “U.S. Silica has been a leader in the industrial silica and minerals industry for 124 years, and this agreement is a great outcome for our stockholders that paves the way for the Company’s continued success well into the future.
“By partnering with Apollo Funds, we gain significant resources, deep industry expertise and enhanced flexibility as a private company to pursue the many market opportunities in front of us and invest in innovative capabilities that enable value-added offerings for customers.
“U.S. Silica has long benefitted from our large-scale production, high-quality reserve base, geographically advantaged footprint, low-cost platform, and strong customer relationships.”
The transaction, having received unanimous approval from U.S. Silica’s board of directors, is anticipated to finalise in Q3 2024. It is subject to pending customary closing prerequisites such as approval from U.S. Silica stockholders and regulatory clearances.
Piper Sandler & Co. is providing financial advisory services to U.S. Silica, while Morrison & Foerster is acting as legal counsel for the company. On the other side, Wachtell, Lipton, Rosen & Katz is representing Apollo Funds as legal counsel, with BNP Paribas Securities Corp and Barclays serving as financial advisers.