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Tuesday, 12/12/2017 11:18:52 AM

Tuesday, December 12, 2017 11:18:52 AM

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Unimin to buy shale sand supplier Fairmount in cash-and-stock deal

(Reuters) - Fairmount Santrol Holdings Inc said on Tuesday it would sell itself to Unimin Corp in a cash-and-stock deal to create one of the largest suppliers of sand for use in hydraulic fracturing to shale oil and gas producers.

The deal, which is expected to close by the middle of next year, will create a company with about $2 billion in annual revenue and will supply more than 45 million tons of sand annually. The new company will also supply industrial coatings.

Sand, known as proppant in the oil industry, is used as part of the fracking process to hold open tiny cracks in shale rock in order to allow hydrocarbon molecules to escape. Oil companies typically shop for various shapes and sizes of sand to suit their geology. That has made the sand industry appealing to investors in recent years.

"Together we will serve our customers more efficiently and effectively with a broader and more diverse product offering, greater technical expertise, improved scale and geographic diversity and an expanded logistics platform," Fairmount Chief Executive Jenniffer Deckard said in a statement.

Deckard is expected to be CEO of the new company, which has not yet been named.

Fairmount shareholders will receive $170 million in cash and own about 35 percent of the new company after the deal closes. Unimin, a division of Belgium-based SCR-Sibelco NV, will own the rest.

Shares of Fairmount rose 4.6 percent to $5.27 after the deal was announced.

Source:

https://www.reuters.com/article/us-fairmount-m-a-sibelco/unimin-to-buy-shale-sand-supplier-fairmount-in-cash-and-stock-deal-idUSKBN1E6200

Marker:
Fairmount Santrol Ho (FMSA)
$5.19 up 0.15 (2.98%)
Volume: 7,353,300


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