ProFrac Holding Corp. announced that it successfully completed its acquisition of SP Silica of Monahans, LLC, and SP Silica Sales, LLC (collectively, “Monahans”), the West Texas subsidiaries of Signal Peak Silica, for approximately $90 million.
Matthew D. Wilks, ProFrac’s Executive Chairman, stated, “We are excited to add the Monahans mine to our portfolio that when combined with our Kermit and La Mesa mines will provide ProFrac with close proximity sand supply to almost every well in West Texas. This increases our efficiency in the region through our ability to reduce truck traffic, fuel consumption and emissions, which helps manage our costs in this inflationary environment.”
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In addition, ProFrac entered into an amendment to that certain Term Loan Credit Facility (the “Term Loan Credit Facility”), increasing the size of the Term Loan Credit Facility from $302.4 million outstanding as of July 20, 2022, to $452.4 million outstanding with the presently uncommitted option to obtain commitments for potentially an additional $100 million of delayed draw loans (the “Option”) before the earlier to occur of (i) the consummation of the previously announced agreement to acquire U.S. Well Services, Inc. and (ii) March 31, 2023. The maturity date with respect to the Term Loan Credit Facility remains the same at March 4, 2025.
ProFrac used proceeds from the increased Term Loan Credit Facility to fund the Monahans acquisition, and anticipates using the balance of the proceeds and operating cash to facilitate the acquisition of U.S. Well Services Inc., to pay outstanding debt under the Company’s ABL Credit Facility and/or for other general corporate purposes. In connection with upsizing the Term Loan Credit Facility, the ABL Credit Facility was revised to add an uncommitted $100 million Incremental Facility (the “Incremental Facility”), under the terms of which existing lenders can make additional loans (in their sole discretion) under, or new lenders can join, the Incremental Facility and increase the potential size of the ABL Credit Facility from $200 million to $300 million, subject to satisfaction of certain conditions.