Smart Sand, Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Smart Sand, Inc. on March 4, 2022. The filing discloses the entry into a material definitive agreement and the completion of an asset acquisition involving a frac sand mine and processing facility in Blair, Wisconsin.
Key Financial Metrics
The filing does not provide standard financial metrics such as revenue, profit, cash flow, margins, or debt levels for the reporting period. The primary financial data point disclosed is the transaction consideration.
- Acquisition Consideration: $6.45 million in aggregate cash.
- Target Asset: Hi-Crush Blair LLC (Blair), including a frac sand mine and processing facility.
- Asset Capacity: Approximately 2.8 million tons of total annual processing capacity.
- Asset Status: Currently idled.
Material Changes
Smart Sand, Inc. acquired all issued and outstanding limited liability company interests of Hi-Crush Blair LLC from Hi-Crush Inc. (HCR). This transaction expands Smart Sand's asset base with a facility featuring an onsite unit train capable rail terminal with access to the Class 1 Canadian National Railway. The consideration was determined through arms-length negotiations rather than a specific formula.
Related Party Transactions and Governance
Entities affiliated with Clearlake Capital Group, L.P. own approximately 24% of Smart Sand's outstanding common stock and a significant portion of HCR's stock. Representatives of Clearlake serve on the boards of directors for both companies. The transaction was unanimously approved by the disinterested directors of both Smart Sand and HCR.
Investor Verification Checklist
- Verify the customary purchase price adjustments referenced in the Membership Interest Purchase Agreement (Exhibit 2.1).
- Confirm the capital expenditure requirements to restart the idled Blair facility.
- Review the impact of the $6.45 million cash outflow on the company's current liquidity position.
- Assess the strategic fit of the Blair facility's rail access relative to Smart Sand's existing logistics network.