Fairmount Minerals, one of North America's largest providers of industrial sand to the oil and gas industry, is exploring an initial public offering of around $1 billion that could come later this year, people familiar with the matter said on Monday.
The move makes Fairmount the latest sand mining company seeking to capitalize on strong investor demand for shares of services companies that are benefiting from the shale energy boom the United States is experiencing.
American Securities, the private equity firm that controls Fairmount, has held talks with investment banks in recent weeks about an IPO that could value the mining company at over $6 billion, including debt, the people said.
The sources asked not to be identified because the discussions are private. American Securities declined to comment while a Fairmount Minerals representative did not respond to a request for comment.
The IPO would come after a rally in the shares of Fairmount's publicly listed peers, including Emerge Energy Services, Hi Crush Partners and U.S. Silica Holdings, which is backed by private equity firm Golden Gate Capital LLC.
Founded in 1986, Fairmount produces industrial sand, silica and related sand-based proppants used mainly in the oil and gas sector but also in industrial and recreational applications, ranging from water treatment to synthetic turf fields.
American Securities acquired a 51 percent equity stake in the Chesterland, Ohio-based company from its founders in 2010 for an undisclosed amount.
Last year, Fairmount replaced its chief executive of 17 years Chuck Fowler with Jenniffer Deckard, a former chief financial officer of the company.
In 2013, it also acquired FTS International Services' proppant business, which included sand mining plants, resin-coating plants facilities distribution terminals.
— By Reuters