Posted on April 29, 2024
Funds managed by affiliates of Apollo (NYSE: APO) will buy frac sand provider U.S. Silica Holdings Inc. (NYSE: SLCA) for $1.21 billion, the latest in a wave of acquisitions in the shale industry.
U.S. Silica investors will receive $15.50 in cash for each share of common stock, the company said in a statement. The purchase price represents an 18.7 percent premium to U.S. Silica’s April 25 closing price, according to the statement.
U.S. Silica, which provides sand to prop open tiny cracks in oil-bearing rock, is one of the last of the major frac sand miners to exit the public market. The sand market has gone through several boom-and-bust cycles, with U.S. Silica’s chief executive officer referring to a 2022 demand surge as “sandemonium” as prices jumped 150 percent.
But as the shale patch has aggressively looked to cut costs, the sand-supply industry has also changed. Explorers in the southern U.S. used to get sand via train from Wisconsin during the early days of the shale boom, and have since been able to mine it closer to home in the dusty plains in West Texas.
The deal is expected to close in the third quarter. Piper Sandler (NYSE: PIPR) acted as financial adviser to U.S. Silica, while BNP Paribas Securities Corp. and Barclays (NYSE: BCS) advised Apollo.
