Who Owns Hi-Crush Partners Company?

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Who Owns Hi-Crush Partners Now?

The proppant industry witnessed a major shift on March 5, 2024, when Atlas Energy Solutions Inc. acquired Hi-Crush Inc. for $450 million, solidifying its position as the largest proppant producer in the U.S. This strategic move reshapes the landscape of Hi-Crush Partners SWOT Analysis, impacting its market influence and operational strategies. Understanding the evolution of Hi-Crush ownership is key to navigating the dynamic energy sector.

Before the acquisition, Hi-Crush underwent a significant transformation, including emerging from Chapter 11 bankruptcy in 2020, which redefined its ownership structure. This acquisition integrates Hi-Crush's assets into a larger entity, making it crucial to examine the key stakeholders and governance structures that have shaped its trajectory. This comprehensive analysis explores the history of Hi-Crush's ownership, the influence of private equity, and the recent industry trends that led to this pivotal acquisition. Considering the questions like "Who acquired Hi-Crush Partners" and "What happened to Hi-Crush Partners" is essential.

The story of the company, initially known as Hi-Crush Partners LP, began in 2010. The company's journey started with the contribution of its Wyeville facility from Hi-Crush Proppants LLC, setting the stage for its future in the sand mining industry.

Early ownership details show Hi-Crush Proppants LLC holding a significant stake. This initial structure and the strategic moves that followed highlight the founders' vision for the company. Understanding the early ownership is key to grasping the company's evolution.

Hi-Crush's early operations and expansion were marked by strategic acquisitions. These moves were instrumental in transforming it into a comprehensive provider of frac sand solutions. The company's history reflects a strategic approach to growth.

Initial Ownership

Hi-Crush Proppants LLC, the former sponsor, held a significant stake. As of August 15, 2014, they owned approximately 13,640,351 shares. The value of these shares was over $227,112, highlighting the initial financial backing.

Early Acquisitions

In June 2013, Hi-Crush acquired D&I Silica, LLC. This acquisition was a strategic move towards becoming an integrated producer. Further acquisitions included FB Industries Inc. in August 2018 and BulkTracer Holdings LLC in January 2019.

Logistics Expansion

The acquisition of FB Industries Inc. in August 2018 expanded logistics services. This move added silo-based frac sand management systems to the company's offerings. The purchase of BulkTracer Holdings LLC added PropDispatch logistics software.

Proppant Logistics

In May 2019, Hi-Crush acquired Proppant Logistics LLC. This acquisition included Pronghorn Logistics, LLC, which provided end-to-end proppant logistics services. This acquisition strengthened the company's position in the market.

Integrated Provider

The founders aimed to create a comprehensive proppant solution provider. The acquisitions of D&I Silica, LLC, FB Industries Inc., BulkTracer Holdings LLC, and Proppant Logistics LLC reflect this goal. These moves were key to the company's strategy.

Strategic Vision

The early acquisitions showcase a clear strategic vision. The company's focus on integration and logistics was evident from the start. This vision shaped the company's development in the sand mining sector.

Key Takeaways

The early years of the company, initially known as Hi-Crush Partners, were marked by strategic acquisitions and a focus on integration. The initial ownership structure involved Hi-Crush Proppants LLC, which held a significant stake. This early period set the stage for the company's growth and evolution. For more details, you can read this Brief History of Hi-Crush Partners.

• The company's formation in 2010 marked the beginning of its journey.
• Hi-Crush Proppants LLC was a key initial owner.
• Acquisitions of D&I Silica, LLC, FB Industries Inc., BulkTracer Holdings LLC, and Proppant Logistics LLC expanded the company's scope.
• These strategic moves aimed to create a comprehensive proppant solution provider.

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The ownership of the former Hi-Crush Partners has seen significant changes over time. Initially structured as a master limited partnership (MLP), it converted to a C-Corporation, Hi-Crush Inc., in May 2019. This shift aimed to simplify governance and potentially attract a wider range of investors. The conversion involved exchanging outstanding common units for common stock on a one-for-one basis.

A pivotal moment occurred in October 2020 when Hi-Crush emerged from Chapter 11 bankruptcy as a private company. This restructuring eliminated roughly $450 million in debt and over $76 million in annual interest expenses. Following the bankruptcy, the company was delisted from the New York Stock Exchange, and all publicly traded stock was canceled. Before the recent acquisition, Clearlake Capital Group L.P. and Whitebox Advisors LLC were the controlling shareholders of Hi-Crush Inc.

On March 5, 2024, Atlas Energy Solutions Inc. finalized its acquisition of Hi-Crush Inc. The transaction, valued at $450 million, included $150 million in cash, $175 million in Atlas Energy Solutions common stock, and $125 million in deferred cash payments. This acquisition has positioned Atlas Energy Solutions as a leading proppant producer and logistics provider in the Permian Basin. The combined entity is expected to have a production capacity of around 28 million tons, increasing to approximately 29 million tons in 2025. This strategic move aims to enhance operational efficiency and boost free cash flow generation. To learn more about the company's strategic moves, take a look at the Growth Strategy of Hi-Crush Partners.

Key Takeaways on Hi-Crush Ownership

The ownership structure of Hi-Crush has evolved significantly, from an MLP to a C-Corp, and then to a private company after bankruptcy, and finally to being acquired by Atlas Energy Solutions.

• The acquisition by Atlas Energy Solutions in March 2024 marked a significant shift.
• Clearlake Capital Group L.P. and Whitebox Advisors LLC were key shareholders before the acquisition.
• The company's focus is now on leveraging its position in the Permian Basin.
• The acquisition aimed to strengthen its position as the largest proppant producer.

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Following its emergence from Chapter 11 bankruptcy in October 2020, the board of directors for Hi-Crush Inc. was restructured. Key figures on the board included Colin Leonard, who served as Chairman and was a Partner at Clearlake Capital Group L.P., a significant shareholder. Other board members at the time included Brad Kottman, Jacob Mercer, Marc Rowland, and CEO Robert Rasmus. Dirk Hallen, who became CEO in November 2020, also held a position on the board.

Since the acquisition by Atlas Energy Solutions Inc. on March 5, 2024, the governance structure of Hi-Crush Partners has changed. Hi-Crush now operates as a subsidiary of Atlas Energy Solutions, meaning the board of directors and shareholders of Atlas now hold the ultimate control and voting power. This shift reflects a strategic realignment within the Hi-Crush Partners business model.

As of December 31, 2023, Atlas Energy Solutions had a fully diluted share count of 100,025,584. Upon its initial public offering, principal stockholders were expected to hold approximately 54.6% of the voting power of their Class A common stock and Class B common stock combined. This indicates a concentration of voting power among these key shareholders, positioning Atlas as a 'controlled company' under NYSE corporate governance rules.

Ownership and Control

The acquisition by Atlas Energy Solutions Inc. in March 2024 fundamentally changed the Hi-Crush ownership structure. Atlas Energy Solutions, led by Bud Brigham, now controls Hi-Crush, with significant voting power concentrated among its principal stockholders.

• Atlas Energy Solutions acquired Hi-Crush.
• Atlas is focused on maximizing stockholder value.
• Principal stockholders hold a significant portion of voting power.
• Hi-Crush is now an operating subsidiary of Atlas.

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The most significant recent development in the Hi-Crush Partners ownership profile is the acquisition by Atlas Energy Solutions Inc., finalized on March 5, 2024. This transaction, valued at $450 million, saw Atlas acquire Hi-Crush's Permian Basin proppant production assets and North American logistics operations. The acquisition involved $150 million in cash, $175 million in Atlas Energy Solutions common stock, and $125 million in deferred cash payments. This marked a complete shift in ownership, integrating Hi-Crush into Atlas's operations.

Prior to this acquisition, Hi-Crush Inc. was controlled by Clearlake Capital Group L.P. and Whitebox Advisors LLC. The company underwent a major restructuring in October 2020, emerging from Chapter 11 bankruptcy as a private entity, which led to the cancellation of its publicly traded stock. This move was a strategic transformation to reduce debt and streamline operations, a key aspect of the Growth Strategy of Hi-Crush Partners.

Industry trends in the proppant and oil and gas sectors often involve consolidation and strategic acquisitions. The acquisition of Hi-Crush Partners by Atlas Energy Solutions exemplifies this, creating a larger, more integrated service provider. The combined entity is projected to have a pro forma production capacity of approximately 28 million tons, increasing to about 29 million tons in 2025. Atlas anticipates over $20 million in annual synergies by 2026 from this acquisition, reflecting a broader trend towards optimizing supply chains and reducing costs in the dynamic oil and gas market.

Acquisition Value

The acquisition of Hi-Crush by Atlas Energy Solutions was valued at $450 million. This included cash, stock, and deferred payments.

Production Capacity

The combined entity is projected to have a pro forma production capacity of approximately 28 million tons, increasing to about 29 million tons in 2025.

Synergies Anticipated

Atlas anticipates realizing over $20 million in annual synergies by 2026 from the acquisition of Hi-Crush.

Ownership Before

Before the acquisition, Hi-Crush was controlled by Clearlake Capital Group L.P. and Whitebox Advisors LLC.

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