Hi-Crush acquires FB Industries for $60 million
HOUSTON -- Hi-Crush Partners entered into a purchase agreement to acquire FB Industries Inc., a manufacturer and marketer of silo-based frac sand management systems for a total initial consideration of approximately $60 million. The transaction is expected to close in the third quarter of 2018.
The company also signed an amendment to an existing sand supply and PropStream services agreement with a supermajor E&P customer supporting, through reservation commitments, an 850,000 tons/year expansion of the Wyeville facility for Northern White supply and anchoring the development of a second 3.0 MM tons/year Kermit facility for in-basin Permian supply.
“Our announcements today touch all aspects of our operating strategy, further diversify our business and elevate Hi-Crush’s position as an industry-leader in the growing market for frac sand and its delivery,” said Robert E. Rasmus, CEO of Hi-Crush. “At a critical time in our industry’s evolution, customers are seeking more integrated relationships with suppliers capable of delivering their full range of frac sand and logistics needs. With these announcements, Hi-Crush will be the industry’s only fully-integrated frac sand supply and logistics provider with a diversified production base, an owned and operated terminal network, and a differentiated last mile service, PropStream, offering both container and silo-based solutions. With the completion of this acquisition and execution of our development projects, Hi-Crush will operate 17.3 MM tons/year of nameplate frac sand capacity and control the industry’s most vertically-integrated logistics network.”
“Our emphasis on providing solutions to meet the needs of our expanding and evolving customer profile, combined with financial flexibility, has allowed us to focus efforts on identifying this unique acquisition opportunity and entering into an amended supply agreement that underwrites our Northern White production expansion and a significant portion of our in-basin Permian capacity growth,” said Laura C. Fulton, CFO of Hi-Crush.
“We continue to expect demand for frac sand to grow to over 110 MM tons in 2018, with expectations for 2019 demand to be even higher. The tightness in reliable sand supply, resulting from this significant demand growth, as well as delays in our competitors’ announced construction projects, puts an even greater emphasis on the need for a fully-integrated frac sand supply and logistics provider."
