Eagle Materials Acquires CRS Proppants

Eagle Materials Inc. has entered into a definitive agreement to acquire CRS Proppants LLC and its subsidiaries, including Great Northern Sand LLC (CRS Proppants), an established supplier of high-quality northern-white frac sand to the energy industry.

The transaction aligns well with Eagle Materials’ growth strategy, according to the company. CRS Proppants’ operations are highly complementary with Eagle Materials’ existing frac sand operations. CRS Proppants operations include:

  • A northern-white frac sand mine and processing facility in Wisconsin that is currently being expanded from approximately one million to two million tons per year capacity.
  • Existing long-term sales contracts with targeted customers for approximately 85 percent of the two million tpy of capacity.
  • UP rail-based trans-load network from the mine into the Permian and other target basins.
  • A highly experienced operating, sales and logistics team.


The cash purchase price of approximately $225 million is subject to adjustments for working capital and other items, and will be funded by operating cash flow and borrowings under Eagle’s bank credit facility. Revenues, EBITDA and earnings before income taxes from continuing operations for the nine-months through Sept. 30, 2014, for CRS Proppants were $64.7 million, $12.2 million and $8.7 million, respectively.

The acquisition is expected to be immediately accretive and synergies of $5 million are expected to be realized within the first 12 months. The acquisition will roughly double Eagle’s frac sand production capacity and expand Eagle’s frac-sand reserves.

Steven Rowley, Eagle Materials’ president and chief executive officer, said, “The acquisition represents another key step in Eagle’s growth strategy for the frac sand business. We are building a low delivered-cost frac sand supply-system that will serve a number of targeted shale plays with the highest-quality northern white sand. This acquisition will enable us to immediately serve the Permian basin, in particular, with increased production, while creating synergies with our other operations in Texas that are currently serving the Eagle Ford with sand from our Illinois mine.”

Under the definitive agreement, the acquisition is subject to certain customary conditions, including clearance under the Hart-Scott-Rodino Act. The company currently expects that the acquisition will close during Eagle’s third fiscal quarter of the current year.

Related posts