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Preferred Sands pitches IPO
Posted on Friday, 11 August 2017 11:29
KKR-backed Preferred Sands is trying its hand at raising fresh equity on the New York Stock Exchange by way of an initial public offering (IPO) that would fund the repayment of debt and finance working capital.

The Pennsylvanian sand and resin coated proppants producer has already hired Credit Suisse, Morgan Stanley and its own parent as underwriters for the proposed listing which has a placeholder of USD 100.00 million.

Founder and chief executive Michael O'Neill, together with other investors, formed predecessor Preferred Proppants in 2007 to acquire, integrate, develop and manage industrial mineral assets.

KKR came on board in the third quarter of 2014 after leading a USD 700.00 million debt and equity investment, which was followed by a USD 75.00 million incremental first lien term loan to its subsidiary with the same name in September 2016.

Preferred Sands was established in March 2017 and is planning to carry out an internal reorganisation after the pricing of the IPO but before the offering closes in order to become the sole managing member of its Preferred Proppants arm.

The company is one of North America's largest producers of sand and resin coated proppants – serving the oil and gas industry through the ownership and operation of a portfolio of geographically diversified mines and processing and coating plants.

It is currently in the process of developing new in-basin regional sand facilities, consisting of two located in the Permian basin in Monahans and Kermit, Texas, and one in the Eagle Ford shale in Atascosa, Texas.

These sites should start up in the first six months of 2018 and increase total processing capacity to about 14.00 million tons.

Preferred Sands’ predecessor had net sales of USD 339.42 million in the 12 months ended 31st December 2016 (FY 2015: USD 171.81 million) and of USD 59.81 million in Q1 2017 (Q1 2016: USD 47.44 million).

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