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U.S. Silica (SLCA) Wraps Up Acquisition of EP Minerals
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U.S. Silica Holdings, Inc. (SLCA - Free Report) has completed the previously announced $750 million acquisition of EP Minerals.
EP Minerals is a worldwide producer of engineered materials derived from industrial minerals. The buyout will help U.S. Silica to diversify its profit sources and add additional EBITDA from a broader industrial space to better balance its portfolio. Notably, EP Minerals’ business has robust margins and consistent cash flows. It also has a robust pipeline of new products and numerous growth opportunities.
Moreover, EP Minerals is an attractive and adjacent business to the Industrial and Specialty Products (“ISP”) business of U.S. Silica, given its industry-leading margins, attractive market structure with opportunities to expand sales. The company has strong IP protection and leverages U.S. Silica’s core competencies as a leading logistics and surface mining company.
U.S. Silica stated that the transaction is financed by $1.28 billion in term-loan facilities. It also increased its revolving credit facility to a total of $100 million.
Shares of U.S. Silica have moved up 6.4% over the past three months, outperforming the industry’s 5.5% gain.
In first-quarter 2018, U.S. Silica recorded a profit of $31.3 million or 39 cents per share, a significant rise from $2.5 million or 3 cents in the year-ago quarter. Adjusted earnings of 54 cents also beat the Zacks Consensus Estimate of 45 cents.
In the first quarter, total revenues jumped around 51% year over year to $369.3 million while revenues for the Oil & Gas unit and the ISP unit rose 62% and 9%, respectively.
For the second quarter, the company expects volumes in the Oil & Gas segment to rise in the range of 10-15%. Moreover, the company expects spot pricing to continue increasing in the second quarter at mid-single digit clips. It also expects improved pricing and volumes for Sandbox.
For the ISP unit, the company expects a strong second quarter with higher volumes and margins, which is likely to be driven by a favorable product mix and positive seasonality.
Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 29.5% over a year.
Huntsman has an expected long-term earnings growth rate of 8.3%. Its shares have rallied 19.8% over a year.
Kronos has an expected long-term earnings growth rate of 5%. Its shares have surged 41.8% over a year.
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U.S. Silica (SLCA) Wraps Up Acquisition of EP Minerals
U.S. Silica Holdings, Inc. (SLCA - Free Report) has completed the previously announced $750 million acquisition of EP Minerals.
EP Minerals is a worldwide producer of engineered materials derived from industrial minerals. The buyout will help U.S. Silica to diversify its profit sources and add additional EBITDA from a broader industrial space to better balance its portfolio. Notably, EP Minerals’ business has robust margins and consistent cash flows. It also has a robust pipeline of new products and numerous growth opportunities.
Moreover, EP Minerals is an attractive and adjacent business to the Industrial and Specialty Products (“ISP”) business of U.S. Silica, given its industry-leading margins, attractive market structure with opportunities to expand sales. The company has strong IP protection and leverages U.S. Silica’s core competencies as a leading logistics and surface mining company.
U.S. Silica stated that the transaction is financed by $1.28 billion in term-loan facilities. It also increased its revolving credit facility to a total of $100 million.
Shares of U.S. Silica have moved up 6.4% over the past three months, outperforming the industry’s 5.5% gain.
In first-quarter 2018, U.S. Silica recorded a profit of $31.3 million or 39 cents per share, a significant rise from $2.5 million or 3 cents in the year-ago quarter. Adjusted earnings of 54 cents also beat the Zacks Consensus Estimate of 45 cents.
In the first quarter, total revenues jumped around 51% year over year to $369.3 million while revenues for the Oil & Gas unit and the ISP unit rose 62% and 9%, respectively.
For the second quarter, the company expects volumes in the Oil & Gas segment to rise in the range of 10-15%. Moreover, the company expects spot pricing to continue increasing in the second quarter at mid-single digit clips. It also expects improved pricing and volumes for Sandbox.
For the ISP unit, the company expects a strong second quarter with higher volumes and margins, which is likely to be driven by a favorable product mix and positive seasonality.
U.S. Silica Holdings, Inc. Price and Consensus
U.S. Silica Holdings, Inc. Price and Consensus | U.S. Silica Holdings, Inc. Quote
Zacks Rank & Stocks to Consider
U.S. Silica currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Huntsman Corporation (HUN - Free Report) and Kronos Worldwide Inc. (KRO - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 29.5% over a year.
Huntsman has an expected long-term earnings growth rate of 8.3%. Its shares have rallied 19.8% over a year.
Kronos has an expected long-term earnings growth rate of 5%. Its shares have surged 41.8% over a year.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>