U.S. Silica (SLCA) Wraps Up Frac Sand Producer Acquisition
U.S. Silica SLCA has wrapped up its acquisition of the NBR Sand unit of New Birmingham Inc., a privately-owned industrial minerals and logistics company. The deal was announced last month.
NBR Sand has a capacity of over two million tons of fine-grade frac sand per annum. It produces 40/70 Mesh and 100 Mesh Silica Sand used in hydraulic fracturing.
The acquisition of the frac sand producer allows U.S. Silica to expand its product offering and capacity in the regional sands market, and enhance customer satisfaction. U.S. Silica is optimistic about the growth of the regional sand market and is looking to create a strong foothold in the same.
U.S. Silica’s strong balance sheet provides it with ample opportunities for making strategic investments this that will help expand the life of its flagship operation and ensure its long-term competitive position in the market. The company’s decision to raise capital in first-quarter 2016 enhanced its financial flexibility and strengthened its balance sheet.
U.S. Silica, in May 2016, also purchased a fully permitted, 327-acre parcel of land adjacent to its present silica sand mine and plant in Ottawa, IL. The company intends to use the property for future mining operations.
U.S. Silica posted better-than-expected results in second-quarter 2016. Its adjusted loss for the quarter came in at 17 cents per share, narrower than the Zacks Consensus Estimate of a loss of 23 cents. Revenues of $117 million also beat the Zacks Consensus Estimate of $116 million.
U.S. Silica is currently focusing on cost reduction and operational efficiency improvement. The company believes these measures will help it survive in the current downturn and increase profitability when the market reverses. The company is on track to deliver roughly $50 million of cost improvements in 2016.
U.S. Silica currently has a Zacks Rank #3 (Hold).
US SILICA HOLDI Price
US SILICA HOLDI Price | US SILICA HOLDI Quote
Other Stocks to Consider
Better-ranked stocks in the basic materials space include Rio Tinto plc RIO, Klondex Mines Ltd. KLDX and McEwen Mining Inc. MUX. While Rio Tinto sports a Zacks Rank #1 (Strong Buy), both Klondex and McEwen Mining carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
RIO TINTO-ADR (RIO): Free Stock Analysis Report
US SILICA HOLDI (SLCA): Free Stock Analysis Report
KLONDEX MINES (KLDX): Free Stock Analysis Report
MCEWEN MINING (MUX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
