Smart Sand Acquires Eagle Material’s Proppants Business

Smart Sand Inc of The Woodlands, TX has completed the acquisition of Eagle Materials Inc’s Oil and Gas Proppants segment for an aggregate consideration of US$2 million. The segment’s assets include frac sand mines and related processing facilities in Utica, IL and New Auburn, WI with approximately 3.5 million tons of annual processing capacity. Eagle took an impairment charge of over US$200 million for the business at the end of last year and has been actively searching for alternatives for the business.

Charles Young, Smart Sand’s CEO, said, “We are excited about the consolidation opportunity. This acquisition provides direct access to an additional Class 1 rail line which allows us greater and more sustainable logistics options to continue to broaden our mine to wellsite capabilities for our customers. We believe these additional mining and logistics resources help secure Smart Sand’s ability to be the preferred provider of Northern White frac sand in the proppants market. We believe this acquisition adds valuable assets to our purpose-built portfolio and by financing with equity, we remain focused on maintaining low leverage levels.

“With this acquisition we will be able to expand our footprint into new basins, gain access to new and enhanced logistics options, broaden our customer base and complement our mine to wellsite supply and logistics capabilities. These assets complement our existing business and we are confident we will be able to expand our efficient and low-cost operating model as we continue to provide the highest-quality and most reliable supply of frac sand available on the market today.”

The acquisition was completed on September 18 with the payment of 1.5 million shares of newly-issued Smart Sand common stock. Eagle Materials has agreed to provide initial liquidity support for the segment to Smart Sand pursuant to one or more loans in an aggregate amount of up to US$5 million, which may be issued during the first twelve months from the closing date of the acquisition.

Volume 34, Issue 19

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