Publicly traded U.S. Silica has agreed to be acquired by Apollo Management in an all-cash transaction at an enterprise value of $1.85 billion.
U.S. Silica (NYSE: SLCA) is an industrial minerals company with core capabilities in mining, processing, logistics and material science. The company sells more than 1,500 products to customers that are active in the building products, chemicals, filtration, foundry, glass, oil and gas, recreation, and testing sectors.
U.S. Silica’s products include cellulose filter media; cristobalite used as a filler in the production of ceramics, plastics, and rubber products; diatomaceous earth used as an absorbent, abrasive, and filtration media; ground silica used as a filler and reinforcement in construction materials, ceramics, and glass; limestone and sandstone aggregates used in road construction and building products; magnesium silicate used in laboratories to remove impurities; montmorillonite clay used in cosmetics, pharmaceuticals, and agriculture; perlite, a naturally occurring volcanic glass that is used in filtration applications; and whole grain silica used in glass manufacturing, foundry casting, and oil and gas (fracking) production.
Through March 2024, U.S. Silica had TTM revenues of $1,436 million and TTM EBITDA of $391 million. This yields an EBITDA valuation multiple of 4.7x.
U.S. Silica has 26 operating mines and processing facilities and 2 additional exploration stage properties. The company was founded in 1900 and is today led by CEO Bryan Shinn with headquarters located just west of Houston in Katy, Texas. Post closing, U.S. Silica will continue to be led by Mr. Shinn and its current senior management team.
“U.S. Silica has been a leader in the industrial silica and minerals industry for 124 years, and this agreement is a great outcome for our stockholders that paves the way for the company’s continued success well into the future,” said Mr. Shinn. “By partnering with Apollo, we gain significant resources, deep industry expertise and enhanced flexibility as a private company to pursue the many market opportunities in front of us and invest in innovative capabilities that enable value-added offerings for customers.”
“We are pleased to reach this agreement with Apollo Funds, which we believe will provide our stockholders with compelling, certain, cash value for their shares,” said Charles Shaver, the chairman of U.S. Silica. “Apollo Funds have a strong investment record in the minerals and mining sector and are committed to helping us achieve our long-term objectives while maintaining our core values and customer-centric approach.”
“We have tremendous respect for U.S. Silica and its talented management team and employees and are thrilled to partner with them to unlock the company’s next phase of growth,” said Gareth Turner, a partner at Apollo. “U.S. Silica’s industrial minerals and sand mining and logistics businesses each are proven leaders in their respective markets. We believe there are many opportunities to grow and expand these businesses and we look forward to using our significant industry experience to build on and extend the company’s legacy of excellence to new frontiers.”
New York City-headquartered Apollo (NYSE: APO) has more than $651 billion of assets under management and more than $83 billion dedicated to private equity. The firm has acquired more than 350 companies since its founding in 1990.
“U.S. Silica has long benefitted from our large-scale production, high-quality reserve base, geographically advantaged footprint, low-cost platform, and strong customer relationships,” concluded Mr. Shinn. “Our ability to take this step from a position of strength is a testament to this excellent foundation and the dedication of our employees. I’m incredibly excited about the path ahead.”
Piper Sandler & Co. is the financial advisor to U.S. Silica and BNP Paribas and Barclays are the financial advisors to Apollo.
This transaction is expected to close by the end of the third quarter.
© 2024 Private Equity Professional | May 1, 2024
