Fairmount Santrol Holdings Inc
Fairmount Santrol — Merger or Acquisition (March 2018)
31 slides from Fairmount Santrol's merger presentation, Mar 26, 2018
Slide 1: A Compelling Strategic Transaction with Unimin
March 2018 A Compelling Strategic Transaction with Unimin Exhibit 99.1
Slide 2: Cautionary Statement Regarding Forward-Looking Information
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION This communication contains statements which, to the extent they are not statements of historical or present fact, constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
Slide 3: Note on GAAP and IFRS Reporting Standards
Note on GAAP and IFRS Reporting Standards Fairmount Santrol prepares its financial statements in accordance with U.S. generally accepted accounting principles, or GAAP, while Unimin currently prepares its financial statements in accordance with International Financial Reporting Standards, or IFRS, a
Slide 4: Overview of FMSA & Unimin
S FairmountSantrol Overview of FMSA & Unimin A Compelling Strategic Transaction with Unimin
Slide 5: Core Differentiators for Long-Term Value Creation
Core Differentiators for Long-Term Value Creation Commitment to People, Planet & Prosperity Broad Product Portfolio Technology & Innovation Operational Scale & Efficiencies Value-Enhancing Logistics Fairmount Santrol Long-Term Value Creators
Slide 6: Unimin Complements All Key Value Drivers
Core Differentiators for Long-Term Value Creation Commitment to People, Planet & Prosperity Broad Product Portfolio Technology & Innovation Operational Scale & Efficiencies Value-Enhancing Logistics Unimin Complements All Key Value Drivers ü Unimin enhances value in all areas ü ü ü ü Unimin also pro
Slide 7: FMSA Financial Update and Outlook
FMSA Financial Update and Outlook Sequential proppant volumes -2%, driven by seasonal impacts on production and demand and process engineering changes I&R volumes -1% year-over-year but had strong profitability growth helped by shift to higher-margin products Fourth-quarter 2017 results 5% decrease
Slide 8: Unimin – An Industry Leader
Unimin – An Industry Leader Key Highlights Two Complementary Segments (2) 28Mt Current Capacity 40 Plants (1) Leader in Safety 38 Operating Terminals >450Mt Reserves ~9,500 Railcars ~2,300 Employees Access to Five Class 1 Railroads 10 Minerals Sold Diverse End Uses (3) Includes one mining facility u
Slide 9: Unimin's Multi-Mineral Portfolio Serves a Wide Variety of Industries
Unimin’s Multi-Mineral Portfolio Serves a Wide Variety of Industries ceramics polymers glass coatings oil & gas metals construction Silica ✓ ✓ ✓ ✓ ✓ ✓ ✓ Feldspar Olivine Clay & Kaolin Lime Nepheline Syenite ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Diversity across minerals and markets = Resilient performan
Slide 10: Compelling Strategic Combination
Compelling Strategic Combination
Slide 11: Product Breadth to Win Across Segments
Product Breadth to Win Across Segments Broad Product Portfolio Wide Range of Customer Segments Glass Construction & Building Products Ceramics Coatings & Polymers Metals & Castings Filtration Oil & Gas High-Purity Sands High-quality silica sand for O&G and Industrial markets Custom Blending Custom b
Slide 12: Complementary Footprint Across North America
Complementary Footprint Across North America Plants Plants Terminals Terminals Excludes coating operations in Denmark & China Includes O&G and Industrial Note: Locations represented as accurately as possible, indicative only >50 sand & coating plants across North America (1) Access to all major rail
Slide 13: Diversified, Strong Logistics to Meet Demands Across North America
Combined distribution network has access to major railroads Combined terminal network increases throughput capacity and network flexibility Increased unit train terminals allow for more effective and efficient shipments Diversified, Strong Logistics to Meet Demands Across North America Annual O&G Te
Slide 14: Scale with Diversity and Balance
Scale with Diversity and Balance Pro Forma Volume; mm tons Combined Company Pro Forma Gross Profit (1) $M Sales Volumes Profitability Fairmount financials prepared under US-GAAP; Unimin financials prepared under IFRS Industrial Materials Proppant Solutions $573M 79% 21% 54% 46% 58% 42% LTM (9/30/201
Slide 15: Meaningful EBITDA Throughout Cycles
Meaningful EBITDA Throughout Cycles Adjusted EBITDA (1) Fairmount Adj. EBITDA as disclosed in SEC filings, Unimin financials prepared under IFRS with Adjusted EBITDA developed consistent with Fairmount methodology for comparability purposes $M Industrial segment provides solid EBITDA base with signi
Slide 16: A Compelling Strategic Transaction with Unimin
r-. w FairmountSantrol A Compelling Strategic Transaction with Unimin
Slide 17: 2018 Tailwinds in Industrial Markets
Industrial profitability aided by macro tailwinds and: Pricing increases Mix shift to higher-margin products 2018 Construction Spending Forecast +4.0%4 Consumer Confidence at 130.8² Highest level since 2000 and above 2017 avg. of 120.5 Foundry spending growth +4.7% vs. 2017³ Industrial Production¹ +
Slide 18: Expected Increase in Proppant Demand for 2018
Expected Increase in Proppant Demand for 2018 Average Proppant Tons per U.S. Horizontal Well 4,600 - 5,000 5,600 - 6,000 3,600 - 4,000 6,500 - 7,000 2018 Proppant demand forecasted to reach 100 million tons (vs. ~ 75 million tons in 2017) U.S. Horizontal Land Rig Count Higher average rig count vs. 2
Slide 19: Proppant – Growing Demand Across All Basins
Proppant – Growing Demand Across All Basins Expected 2018 demand to be supplied by both Northern White and Local/Regional sands Millions of tons 100M Tons in 2018 Coarse 40/70 100 Mesh 40/70 ~75M tons of demand supplied outside of the Permian In the Permian, most of 40/70 and all coarser grades will
Slide 20: Permian Assets Strategically Placed to Meet Local Needs
Permian Assets Strategically Placed to Meet Local Needs Unimin Terminals Fairmount Santrol Plant Fairmount Santrol Terminals 6M ton combined capacity 2 plants in complementary locations Online in Q2-18 Strategically located terminal network Drilling Activity UP BNSF TXPF (shortline to BN) Unimin Pla
Slide 21: Well Suited to Meet Demand Across All Basins
Well Suited to Meet Demand Across All Basins Favorable Grade Mix ~75M tons Demand Sourced Outside of Permian Unimin/FMSA Market Source: Management estimates Logistics network allows cost-competitive distribution into all basins Logistics Capabilities Production Mix Outside of Permian
Slide 22: Value Creation for Fairmount Santrol Shareholders
Value Creation for Fairmount Santrol Shareholders
Slide 23: FMSA / Unimin Merger: Shareholder Value Creation
FMSA / Unimin Merger: Shareholder Value Creation Value Creation for FMSA Shareholders At Closing: FMSA Shareholders: 35% of Combined Company Shares $170M Cash Consideration Sibelco: 65% of Combined Company Shares
Slide 24: 35% Ownership Implies a Premium Even at Equal Multiples
35% Ownership Implies a Premium Even at Equal Multiples Implied Value Contribution to Combined Company (1) (2) Relative cumulative EBITDA contribution (like-for-like basis). Adjusted for net debt (Fairmount: $632M; Unimin: $831M) by applying the implied Fairmount Santrol EBITDA multiple to Unimin EB
Slide 25: Industrial Peers Trade at ~10.0x Multiples
Industrial peers trade at ~10.0x multiples with lower volatility compared to proppant companies 45% of the Combined Company’s LTM 9/30/17 gross profit from industrial business Value of Stability Reflected in Industrial Trading Multiples Industrial Peer Multiples (1,2) TEV multiple of 2018E EBITDA me
Slide 26: >$1Bn Value Creation from Quantified Synergies
>$1Bn(1) Value Creation from Quantified Synergies Based on net present value Synergy split based on 2020 annual estimates by category Synergy estimates developed through third-party market model incorporating significant in-basin capacity build Immediate and Substantial Synergies Expected at Low Imp
Slide 27: Roadmap to Completion
Roadmap to Completion Shareholder Process Shareholder Approval Expected early Q2 18 Expected 20 business days after proxy mailing Regulatory Process Regulatory Approval US FTC granted early termination / Mexico ongoing Integration Planning Day 1 Readiness On Track for Mid-2018 Closing Authorities re
Slide 28: Additional Supplemental Information
Additional Supplemental Information
Slide 29: A Leading Supplier of Proppants to the O&G Segments
A Leading Supplier of Proppants to the O&G Segments Unimin’s Energy Business Well Cementing Additives Gravel Packing Sand Raw Sand Coated Sand High quality reserves produce monocrystalline silica grains that are spherical, stronger and have superior particle size distribution (within API specificati
Slide 30: Large, Resilient and Growing Business Generating Strong Cash Flows
Large, Resilient and Growing Business Generating Strong Cash Flows Unimin’s Industrial Business Key Highlights Diverse Customer Segments Served Highly resilient and growing business generating strong cash flows with annual gross profit in excess of $180M (1) Large, stable blue-chip customer base Bes
Slide 31: Shared Values and Global Expertise
Shared Values and Global Expertise Sibelco – Long-Term Shareholder Long track record and experience in working with industrial minerals companies to create value Focus on sustainable development and returns as long-term shareholder In-depth knowledge of world markets with global customer relationshi
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