U.S. Silica Has 'Growing' M&A Prospects, Cowen Says


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


Cowen’s Marc Bianchi maintained an Outperform rating for U.S. Silica Holdings Inc (NYSE: SLCA) after the company announced an 8.7 million share equity offering.

The equity offering is around 16 percent dilutive, excluding the green-shoe option of 1.33 million shares. Assuming an offer price of $20 per share, the offering is expected to generate gross proceeds of $174 million, analyst Marc Bianchi mentioned.

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“We view this as an opportunistic equity offering in light of an open equity issuance window and a growing list of M&A opportunities, however nothing specific appears to be identified for these proceeds,” Bianchi wrote.

Acquisition Plans

U. S. Silica raised its term loan by $115 million in July 2013 and acquired Cadre Services in July 2014. Although U. S. Silica’s near-term acquisition plans could include “non-traditional frac sands, logistics assets, or something within ISP,” over the long-term, the company is committed to making a transformation acquisition, the analyst said.

A transformation deal of public or large private companies is likely to require more capital. Following this offering U. S. Silica will have $470 million cash and cash equivalents, Bianchi pointed out. The company’s net debt is also expected to be reduced to $20 million.


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


Posted In: Analyst ColorLong IdeasReiterationAnalyst RatingsTrading IdeasCowenMarc Bianchi