Hi-Crush Partners LP Announces Completion of Acquisitions and Underwriter's Exercise of Overallotment Option
March 21 2017 - 4:30PM
News Release
Hi-Crush Partners
LP Announces Completion of Acquisitions of Permian Basin Sand,
Whitehall Facility and Remaining Interest in Augusta Facility;
Underwriter's Exercise of Overallotment Option
Houston, Texas, March 21, 2017 -
Hi-Crush Partners LP (NYSE: HCLP), "Hi-Crush" or the "Partnership",
today announced that it has completed its previously announced
series of purchase agreements, including the acquisition of Permian
Basin Sand Company, LLC ("Permian Basin Sand"), the acquisition of
the Whitehall facility, the acquisition of the remaining 2%
additional interest in Hi-Crush Augusta LLC ("Augusta") and
additional properties located near the Whitehall facility.
Total consideration for these acquisitions was $340 million in cash
and 3,438,789 newly issued common units, exclusive of contingent
earnout consideration associated with the Whitehall transaction.
Hi-Crush today also announced that underwriters have exercised its
full overallotment option on its previously completed public
offering of common units.
"We are extremely excited to
complete these acquisitions, which collectively, significantly
advance our leading position as a complete provider of a full range
of raw frac sand and related services," said Robert E. Rasmus,
Chief Executive Officer of Hi-Crush Partners. "Construction is
underway on our new 3 million ton per year production facility in
the heart of the Permian Basin, with completion expected late in
the third quarter of 2017. Once complete, Hi-Crush will own
and operate approximately 13.4 million tons of total frac sand
capacity, which coupled with our industry-leading logistics network
including our PropStreamTM last-mile
logistics solution, position Hi-Crush to serve the growing needs of
our customers and the industry overall."
The Partnership completed its
previously announced Permian Basin Sand acquisition from a
third-party. Permian Basin Sand includes a 1,226-acre frac sand
reserve consisting of more than 55 million tons of 100 mesh frac
sand, strategically positioned in the Permian Basin, located within
75 miles of significant Delaware and Midland Basin activity.
Hi-Crush acquired Permian Basin Sand for total consideration of
$200 million in cash and 3,438,789 newly issued common units to the
seller. Hi-Crush previously announced that it is in the
process of constructing an on-site processing plant capable of
producing 3 million tons per year (the "Kermit facility").
Total cost for construction of the Kermit production facility is
expected to be in the range of $45 million to $50 million, with an
in-service date planned during the third quarter of 2017. The
acquisition of Permian Basin Sand also includes certain rights to
purchase additional acreage of reserves.
Hi-Crush also completed its
previously announced acquisition of all of the outstanding
membership interests in Hi-Crush Whitehall LLC, the entity that
owns the Whitehall facility, a Northern White frac sand processing
facility with 80.7 million tons of proven recoverable frac sand
reserves on 1,447-acres, with an annual processing capacity of
approximately 2.86 million tons of frac sand per year from Hi-Crush
Proppants LLC ("Proppants"). In addition, Hi-Crush acquired
the remaining 2% ownership interest in Augusta from Proppants and
additional properties located near the Whitehall facility (together
the "Whitehall Acquisition"). The Partnership previously
owned a 98% interest in the Augusta facility, and the acquisition
of the remaining 2% ownership interest increases the Partnership's
ownership share of the Augusta facility to 100%.
Consideration for the Whitehall Acquisition was $140 million in
cash and an agreement to pay contingent earnout consideration up to
$65 million to Proppants over a two-year period.
Hi-Crush announced that
underwriters have exercised the full overallotment option on its
previously completed public offering of common units. On February
24, 2017, Hi-Crush priced a primary public offering of 20,500,000
units representing limited partnership interests in the Partnership
(the "common units") at $18.00 per common unit for total gross
proceeds of approximately $369 million. In connection with
the offering, the Partnership granted the underwriters a 30-day
option to purchase up to an additional 3,075,000 common units on
the same terms. With the underwriter's exercise of the
overallotment option, Hi-Crush sold a total of 23,575,000 public
common units in the offering, raising total gross proceeds of
approximately $424 million (before underwriters' compensation and
estimated expenses).
About
Hi-Crush
Hi-Crush is an integrated producer, transporter, marketer and
distributor of high-quality monocrystalline sand, a specialized
mineral that is used as a proppant to enhance the recovery rates of
hydrocarbons from oil and natural gas wells. Our reserves,
are primarily located in Wisconsin, consisting of "Northern White"
raw frac sand, a resource that exists predominately in Wisconsin
and limited portions of the upper Midwest region of the United
States. In March 2017, we acquired regional raw frac sand
reserves located in the Permian Basin and are currently
constructing a 3 million ton per year production facility.
Once completed, we will own and operate 13.4 million tons per year
of frac sand production capacity. Our Wisconsin reserves are
strategically located with direct access to major U.S. railroads
for efficient distribution to in-basin terminals, while our Texas
reserves are positioned within close proximity to significant basin
activity for advantaged truck transportation. We own and
operate a network of strategically located terminals and an
integrated distribution system throughout North America, including
our PropStreamTM integrated
logistics solution, which delivers proppant into the blender at the
well site. For more information, visit www.hicrush.com.
Investor
contact:
Investor Relations
ir@hicrush.com
(713) 980-6270
Marc Silverberg, ICR
marc.silverberg@icrinc.com
(646) 277-1293
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Hi-Crush Partners LP via Globenewswire
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