PRIVATE EQUITY
STRUCTURED CAPITAL

CASE STUDIES

Industry Vertical
Manufacturing & Distribution
Headquarters
Frederick, MD

www.u-s-silica.com

U.S. Silica Company

  • Business

    U.S. Silica Company (“USS”) was the second largest producer of industrial sand in North America with 22% market share and the #1 or #2 positions in most of its local markets. The company supplied well-diversified, growing end markets including glass, building products, fillers/extenders, foundry, chemicals, oil and gas, matrix materials and ceramics.

  • Situation

    Harvest first diligenced USS in October 2006 during an auction process. Primarily due to the poorly understood silicosis liability, USS was not sold. In March 2007, Harvest re-engaged with the sell-side advisor and was able to negotiate a letter of intent quickly due to its prior due diligence of USS. By June 2007, Harvest completed its due diligence. Harvest acquired 95% of the equity at closing.

  • Harvest Partners Investment

    In August 2007, Harvest purchased USS with the existing management team. To fund the acquisition Harvest arranged the debt financing, which included a senior credit facility and a second lien financing. In addition, Harvest arranged equity co-investment capital for the transaction.

  • Investment Thesis

    • Strong brand and market leader
    • Steadily growing industry
    • Proven management team

  • Value Creation

    • Harvest anticipated creating value through tuck-in acquisitions, pricing improvement and geographic expansion, as well as macro benefits from increased horizontal drilling/shale development
    • Soon after closing, Harvest was approached by an investor that had a larger consolidation strategy in the industry and made Harvest a highly compelling offer.

  • Outcome

    • Sold to Harbinger Capital Partners in October 2007