The Rising Influence of Rising Affluence

[oldberkeley]

U.S. Silica goes public after 111 years
Company produces materials for hydraulic fracturing, solar panels

[I still can’t see the average homeowner going with solar panels—the cost recovery time is too long—but he’s certainly correct that “the U.S. shale revolution is here to stay.”]

http://www.marketwatch.com/story/us-silica-goes-public-after-111-years-2012-02-01?link=MW_story_latest_news

Feb. 1, 2012, 1:29 p.m. EST
By Steve Gelsi

NEW YORK (MarketWatch) — Shares of U.S. Silica Holdings Inc. fell in their trading debut Wednesday as the mining firm with roots going back more than a century raised $200 million in its initial public offering.

U.S. Silica Holdings priced 11.76 million shares at $17 each, the middle of the range estimated for the IPO. In recent trading, the stock fell 2.4% to $16.57.

The producer of silica used in hydraulic fracturing and solar panels was acquired in 2008 by Golden Gate Private Equity Inc. It ranks as the second-largest producer in the U.S. after Unimin, a unit of Belgium-based Sibelco Group.

Golden Gate sold 8.8 million shares in U.S. Silica’s IPO, while U.S. Silica offered 2.9 million shares.

Bryan Shinn, U.S. Silica’s chief executive, said the company originated in West Virginia as a supplier of raw material for glass used in the manufacturing sector in Pittsburgh, before it moved to its current headquarters in Frederick, Md.

The company’s growth prospects are tied partially to the rise in domestic shale oil and gas production, which uses sand to break up rock underground to free-up fossil fuel in the hydraulic fracturing process, also known as fracking.

“The market [for fracking sand] is in extremely short supply right now,” Shinn said in a phone interview. “The U.S. shale revolution is here to stay. We’re in the early innings right now.”

In the nine months ended Sept. 30, U.S. Silica’s net income more than doubled to $20.2 million on sales of $212 million, compared to $7.6 million earned on revenue of $186 million in the comparable period during 2010.

U.S. Silica also makes raw materials for solar panels, with the company seeing demand both domestically and abroad for glass products derived from its sand.

Steve Gelsi is a reporter for MarketWatch in New York.