Acquisition of Monarch Silica, LLC
As previously disclosed in the Current Report on Form 8-K filed by ProFrac with the Securities and Exchange Commission on December 6, 2022, on December 5, 2022, ProFrac II LLC (i) entered into a Membership Interest Purchase Agreement (the “Monarch Purchase Agreement”) by and among ProFrac II LLC, Monarch Capital Holdings, LLC, a Texas limited liability company (“Monarch Capital”), Monarch Silica, and, for the limited purposes set forth therein, David E. Welch and Paul A. Welch, pursuant to which ProFrac II LLC agreed to purchase from Monarch Capital 100% of the issued and outstanding membership interests of Monarch Silica (the “Monarch Equity Transaction”) and (ii) entered into a Real Property Purchase and Sale Agreement by and between ProFrac II LLC and DPW Investments, LLC, a Texas limited liability company (“DPW”), pursuant to which ProFrac II LLC agreed to purchase from DPW all of its right, title and interest in and to certain real property located in Bexar County, Texas (the “Monarch Real Property Transaction” and, together with the Monarch Equity Transaction, the “Monarch Transactions”).
On December 23, 2022, ProFrac II LLC consummated the Monarch Transactions. The aggregate purchase price of the Monarch Transactions was $175 million, of which (i) $87.5 million was paid in cash at the closing of the Monarch Transactions, and (ii) the remaining $87.5 million was paid in the form of a secured note payable to Monarch Capital by ProFrac II LLC (the “Monarch Note”). A portion of the cash consideration is subject to certain customary post-closing adjustments.
The Monarch Note bears interest at a rate of 2.50% per annum and matures on the earlier of (i) December 23, 2024 and (ii) the date on which all amounts thereunder are due and payable pursuant to the terms and conditions thereof. The Monarch Note is secured by ProFrac II LLC’s equity interest in Monarch Silica, substantially all of the assets of Monarch Silica and the real property acquired from DPW in connection with the Monarch Transactions.
Agreement to Acquire REV Energy Holdings, LLC
On December 23, 2022, ProFrac II LLC entered into a Membership Interest Purchase Agreement by and among ProFrac II LLC, REV, Jason Kuzov, an individual (“Kuzov”), Michell Winnick, an individual (“Winnick”), Buffalo Creek, LLC, an Idaho limited liability company (“Buffalo Creek,” and together with Kuzov and Winnick, the “REV Sellers”), and BCKW LLC, a Colorado limited liability company (the “REV Sellers’ Representative”), pursuant to which ProFrac II LLC agreed to purchase from the REV Sellers 100% of the issued and outstanding membership interests of REV (the “REV Acquisition”).