U.S. SilicaSLCA said that it has wrapped up the purchase of logistics solutions provider, Sandbox Enterprises LLC. The deal was announced earlier this month.
Houston-based Sandbox provides state-of-the-art logistics solutions and technology for the transportation of proppant used in hydraulic fracturing in the oil & gas industry. The entity uses specially designed, patent-protected equipment and processes to cost-effectively service well site operations.
The buyout, which provides U.S. Silica with unmatched logistics capabilities, allows the company to offer its customers significantly improved transportation and operating efficiencies and meaningful cost savings relative to existing proppant delivery systems. It is in sync with the company's strategy of managing the entire supply chain of frac sand from the mine to the well site.
U.S. Silica expects the acquisition to be slightly accretive to its earnings per share for 2016 and deliver earnings accretion of between 20 cents and 30 cents per share in 2017.
U.S. Silica also recently completed its acquisition of the NBR Sand unit of New Birmingham Inc., a privately-owned industrial minerals and logistics company. The acquisition allows the company to expand its product offering and capacity in the regional sands market, and enhance customer satisfaction.
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'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 currently has a Zacks Rank #2 (Buy).
US SILICA HOLDI Price
Other Stocks to Consider
Other well-placed 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.
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