FREDERICK, Md., March 23, 2018 /PRNewswire/ -- U.S. Silica
Holdings, Inc. (NYSE: SLCA) today announced a definitive agreement
to acquire EP Minerals for $750
million in cash.
EP Minerals – with sales of over $200
million – is a global producer of engineered materials
derived from industrial minerals including diatomaceous earth (DE),
clay (calcium bentonite) and perlite. The company is the
number one or number two player in each of its global markets.
Similar to U.S. Silica's Industrial and Specialty Products (ISP)
segment, it has transformed from a commodity-based business by
adding new, value-added, higher-margin products to its mix,
developing over 50 innovative new products in the last three years
with 40 plus products in its new development pipeline today.
''EP Minerals checks all of the boxes in terms of what we've
been looking for in an attractive, adjacent business to our ISP
segment,'' said Bryan Shinn,
president and chief executive officer. ''It is a rare find with an
attractive market structure and has industry-leading margins with
exciting opportunities to grow sales. It has strong IP protection
and leverages our core competencies as a premier surface mining and
logistics company. EP Minerals' reliable cash flow also complements
our Oil & Gas segment while providing a robust platform for
expansion and growth through organic opportunities and strategic
bolt-on acquisitions."
EP Minerals' unique industrial minerals are used as filter aids,
absorbents and functional additives for a variety of industries
including food and beverage, biofuels, recreational water, oil and
gas, farm and home, landscape, sports turf, paint, plastics, and
insecticides. The company's facilities are located in Nevada, Oregon, Nebraska, Tennessee, Alabama and Mississippi.
''We look forward to joining forces with U.S. Silica and
benefiting from the strength of the company's mining expertise,
differentiated logistics capabilities and ability to capture value
throughout the supply chain,'' said Gregg
Jones, president and chief executive officer of EP Minerals.
''I also believe that there will be opportunities for our two
companies to collaborate on research and development efforts with
our full R&D team helping to bring new products for both
companies to market faster.''
U.S. Silica's ISP business remains on track for substantial
growth through expansion of base business pricing and volume,
acquiring bolt-ons in attractive, adjacent markets, and by
developing and marketing new, value-added, higher margin products.
U.S. Silica will finance the transaction and refinance its current
debt through a new seven year, $1.280
billion committed Term Loan B credit facility and an
expanded $100 million revolving
credit facility.
The transaction is expected to be accretive in the fourth
quarter of 2018 and is expected to close in the second quarter of
2018.
U.S. Silica will host a conference call today at 7:30 a.m. Central Time to discuss the
acquisition. A live webcast of the conference call will be
available in the "Investor Resources" section of the Company's
website at www.ussilica.com. A presentation on the acquisition
will be available tomorrow morning on the company's website as
well. The webcast will be archived for one year. The call can also
be accessed live over the telephone by dialing (877) 869-3847 or
for international callers, (201) 689-8261. To access the slides,
please click on the following link:
https://event.webcasts.com/starthere.jsp?ei=1187106&tp_key=eb2c13a4e9.
A replay will be available shortly after the call and can be
accessed by dialing (877) 660-6853 or for international callers,
(201) 612-7415. The conference ID for the replay is 13678016. The
replay will be available through April 22, 2018.
Centerview Partners LLC served as investment banking advisor and
Baker Botts L.L.P. served as legal advisor to U.S. Silica. The
Valence Group provided a fairness opinion to U.S. Silica's board of
directors.
Forward-looking Statements
Certain statements in this press release are "forward-looking
statements" made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and speak only as
of this date. Forward-looking statements made include any statement
that does not directly relate to any historical or current fact and
may include, but are not limited to, statements regarding U.S.
Silica's growth opportunities, strategy, future financial
results, forecasts, projections, plans and capital expenditures,
and the commercial silica industry. Forward-looking statements are
based on our current expectations and assumptions, which may not
prove to be accurate. These statements are not guarantees and are
subject to risks, uncertainties and changes in circumstances that
are difficult to predict. Many factors could cause actual results
to differ materially and adversely from these forward-looking
statements. Among these factors are: (1) fluctuations in demand for
commercial silica; (2) the cyclical nature of our customers'
businesses; (3) operating risks that are beyond our control; (4)
federal, state and local legislative and regulatory initiatives
relating to hydraulic fracturing; (5) our ability to implement our
capacity expansion plans within our current timetable and budget;
(6) loss of, or reduction in, business from our largest customers
or failure of our customers to pay amounts due to us; (7)
increasing costs or a lack of dependability or availability of
transportation services or infrastructure; (8) our substantial
indebtedness and pension obligations; (9) our ability to attract
and retain key personnel and truckload drivers; (10) silica-related
health issues and corresponding litigation; (11) seasonal and
severe weather conditions; and (12) extensive and evolving
environmental, mining, health and safety, licensing, reclamation,
trucking and other regulation (and changes in their enforcement or
interpretation). Additional information concerning these and other
factors can be found in U.S. Silica's filings with
the Securities and Exchange Commission. We undertake no
obligation to publicly update or revise any forward-looking
statement as a result of new information, future events or
otherwise, except as otherwise required by law.
About U.S. Silica
U.S. Silica Holdings, Inc., a member of the Russell 2000, is a
leading producer of commercial silica used in the oil and gas
industry, and in a wide range of industrial applications. Over its
118-year history, U.S. Silica has developed core competencies in
mining, processing, logistics and materials science that enable it
to produce and cost-effectively deliver over 200 products to
customers across our end markets. The Company currently operates
nine industrial sand production plants and eight oil and gas sand
production plants. The Company is headquartered in Frederick, Maryland and also has offices
located in Chicago, Illinois and
Houston, Texas.
Contacts
U.S. Silica Holdings, Inc.
Michael Lawson
Vice President of Investor Relations and Corporate
Communications
(301) 682-0304
lawsonm@ussilica.com
Nick Shaver
Investor Relations Manager
281-394-9630
shavern@ussilica.com
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SOURCE U.S. Silica Holdings, Inc.