The stock of Fairmount Santrol (NYSE:FMSA) closed at $6.01 and maintained the same position in yesterday’s trading session. Fairmount is merging with Unimin and they hope that soon they will be able to come up with an industry leader in industrial and proppant materials solutions. If everything moves according to plan, the new company will be listed on the New York Stock Exchange.
An official well conversant with the matter said, “On a pro-forma basis, the combined entity would have had revenue of nearly $2.0 billion and adjusted EBITDA of around $400 million, excluding expected synergies, for the 12-month period ended September 30, 2017. Of this, the industrial segment represents 45% of gross profit while the Proppant segment represents 55%.”
The combined entity will be puling along with an elaborate technical and applications expertise. It will also be bearing the most outstanding nepheline syenite and high-purity sands production in North America.
The combined company will have everything it needs to prosper at its disposal starting with the fact that it will be benefiting from substantial operational synergies, which will be crucial in terms of enhancing value and earnings as well.
It is the goal of each and every company to get to a point where it is assured of diverse revenue streams. And the new company will be expecting them from the industrial segment coupled with combinational synergies, complementarily of assets and increased scale. It will be counting on the complementarity of assets in a significant way because that is what it will take to get the assurance of a more predictable cash flow generation to the new combined entity.
An official working with Fairmount in a recent interview asserted that what they new company was seeking out for was a lifted financial flexibility, including the ability to make strategic investments and reduce leverage.
He went further to outline that it would be a good deal to all the shareholders of Fairmount considering that the transaction will be tax-free for them. The formation of business alliances is an approach that quite a significant number of businesses around the globe are resorting to because of the wide array of the associated benefits.