Hi-Crush Partners LP (NYSE:HCLP) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
On July 19, 2018, Hi-Crush Partners LP, a Delaware limited partnership (the “Partnership”), Hi-Crush Canada Inc., a wholly-owned subsidiary of the Partnership and a Delaware corporation (“US Purchaser”), and Hi-Crush Canada Distribution Corp., a wholly-owned subsidiary of the Partnership and a British Columbia corporation (“Canadian Purchaser”, and together with the US Purchaser, the “Purchasers”), entered into a Purchase and Sale Agreement (the “Agreement”) with FB Industries Inc., a Manitoba corporation (“FB”), 6446508 Manitoba Inc., a Manitoba corporation (“644”), The Henry and Gloria Friesen Family Trust (2013), Tyler Friesen, Mavis Doell, Tracy Friesen, Henry Friesen, Gloria Friesen and Jonathan Doell (collectively, the “Sellers”), and Jonathan Doell, solely in his capacity as the representative of the Sellers (the “Sellers’ Representative”).
Upon the terms and subject to the conditions set forth in the Agreement, (a) US Purchaser will purchase (i) certain goodwill and intellectual property assets from FB, and (ii) all of the issued and outstanding equity of FB Industries USA Inc., a Texas corporation, and FB Logistics, LLC, a Texas limited liability company, in each case from 644; and (b) Canadian Purchaser will purchase all of the issued and outstanding equity of FB from the Sellers (collectively, the “Transactions”). Under the terms of the Transactions, the Partnership, through two of its wholly-owned subsidiaries, will pay cash consideration of approximately $45 million and issue approximately $15 million of new common units to the owners of FB, for total consideration of approximately $60 million. The terms also include the potential for additional future consideration payments based on the achievement of established performance benchmarks through 2021.
The closing of the Transactions is expected to occur in the third quarter of 2018 and is subject to various conditions, including, among others, the accuracy of representations and warranties; the performance of covenants, in all material respects; the absence of a material adverse affect; and the receipt of adequate financing to fund the purchase price.
The Agreement also contains customary termination rights for the parties, including, among others, the right of the Purchasers or the Sellers’ Representative to terminate the Agreement if the closing shall not have occurred on or before August 15, 2018.
The foregoing description of the Agreement does not purport to be complete and is subject to and qualified in its entirety by reference to the full and complete text of the Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 1.01 | Results of Operations and Financial Condition. |
On July23, 2018, the Partnership issued a press release, a copy of which is attached hereto as Exhibit99.1 and incorporated by reference in this Item 1.01, announcing (i)the Partnership’s entry into the Agreement to acquire FB, a leading manufacturer and marketer of silo-based sand management systems, for total initial consideration of $60million, (ii)an amendment to an existing sand supply agreement and (iii)preliminary estimates of selected second quarter 2018 financial results and related capital expenditure plans.
The information contained or incorporated by reference in this Item 1.01, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act unless specifically identified therein as being incorporated therein by reference.
| Item 1.01 | Regulation FD Disclosure. |
The information provided in Item 1.01 is incorporated by reference into this Item 1.01.
In addition, on July23, 2018, the Partnership issued a press release, a copy of which is attached hereto as Exhibit 99.2 and incorporated herein by reference, announcing that the board of directors of its general partner has declared a quarterly cash distribution of $0.75 per unit on all common units of the Partnership, or $3.00 on an annualized basis, for the second quarter of 2018.
The information contained or incorporated by reference in this Item 1.01, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for purposes of Section18 of the Exchange Act, or otherwise subject to liabilities of that section, and is not incorporated by reference into any filing under the Securities Act or the Exchange Act unless specifically identified therein as being incorporated therein by reference.
On July23, 2018, the Partnership issued a press release, a copy of which is attached hereto as Exhibit 99.3 and incorporated in this Item 1.01 by reference, announcing that it intends to commence a private offering of senior notes due 2026.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state. The notes will not initially be registered under the Securities Act or any state securities law and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act and applicable state securities laws.
| Item 1.01 | Financial Statements and Exhibits. |
(d)Exhibits.
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EXHIBIT |
DESCRIPTION |
| 2.1* | Purchase and Sale Agreement, dated as of July 19, 2018, by and among Hi-Crush Canada Inc., Hi-Crush Canada Distribution Corp., and for the limited purposes set forth in Section 9.15, Hi-Crush Partners LP, and FB Industries Inc., 6446508 Manitoba Inc., The Henry and Gloria Friesen Family Trust (2013), Tyler Friesen, Mavis Doell, Tracy Friesen, Henry Friesen, Gloria Friesen and Jonathan Doell, and Jonathan Doell, in his capacity as Sellers’ representative. |
| 99.1 | Hi-Crush Partners LP press release dated July23, 2018 regarding business and operational updates. |
| 99.2 | Hi-Crush Partners LP press release dated July23, 2018 regarding second quarter 2018 distribution. |
| 99.3 | Hi-Crush Partners LP press release dated July23, 2018 regarding commencement of senior notes offering. |
| * | Schedules and exhibits have been omitted to Item 601(b)(2) of Regulation S-K. The Partnership agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request. |
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Hi-Crush Partners LP ExhibitEX-2.1 2 d572338dex21.htm EX-2.1 EX-2.1 Exhibit 2.1 Execution Version PURCHASE AND SALE AGREEMENT BY AND AMONG HI-CRUSH CANADA INC.,…To view the full exhibit click here
About Hi-Crush Partners LP (NYSE:HCLP)
Hi-Crush Partners LP is a producer and supplier of monocrystalline sand. The Company is a limited partnership formed to acquire selected sand reserves and related processing and transportation facilities of Hi-Crush Proppants LLC. It operates in Frac Sand Sales segment. Its reserves consist of northern white sand, a resource in Wisconsin and limited portions of the upper Midwest region of the United States. It owns, operates and develops sand reserves, and related excavation and processing facilities. Its 857-acre facility with rail infrastructure, located in Wyeville, Wisconsin (the Wyeville facility) contains approximately 82.1 million tons of proven recoverable reserves of frac sand meeting American Petroleum Institute (API) specifications. It also holds approximately 98% interest in Augusta facility, which is located in Eau Claire County, Wisconsin and contains over 40.9 million tons of proven recoverable reserves of frac sand meeting API specifications.