Golden Gate Acquires U.S. Silica

Golden Gate Capital and Preferred Unlimited Inc. have completed their acquisition of U.S. Silica from Harbinger Capital Partners. The deal included around $200 million in equity and mezzanine notes from Golden Gate, a $102 million senior note financing arranged by BNP Paribas and a $35 million revolving credit facility from Wachovia. U.S. Silica is a Berkeley Springs, West Va.-based maker of industrial silica sand. Harbinger bought it from Harvest Partners last year for an undisclosed amount.

PRESS RELEASE

Golden Gate Capital (GGC), a San Francisco-based private equity firm, announced today the closing of its acquisition of U.S. Silica Company (USS), the second largest U.S. miner and processor of industrial sand.

U.S. Silica, tracing its origins back to 1900, operates 13 industrial sand and other mineral mines and processing plants in the Midwest and Eastern US. “This is a winning transaction for U.S. Silica’s customers and employees. Golden Gate Capital’s financial backing will enable U.S. Silica to continue to focus on its core end-markets, while also investing in the production of sand for fast-growing end-markets such as frac sand for natural gas drilling and low-iron sand for solar applications,” said John Ulizio, president and CEO of USS, who will continue to lead USS along with the existing management team. “GGC is a strong financial sponsor and appreciates the long-term value of the industrial sand business; we look forward to a successful partnership with GGC.”

“GGC is excited to invest in U.S. Silica as part of our growing focus in the natural resources and industrials space. The company combines over a century of market leadership and stability in its core industrial sand end-markets, with exciting growth prospects in new segments,” said Prescott Ashe, Managing Director of Golden Gate Capital. “Importantly, this transaction represents one of the few private equity deals to be completed during the fourth quarter and reflects the flexible, long-term nature of our evergreen fund, which gives us the unique ability to invest up and down the capital structure and to continue to actively invest even when access to the capital markets remain challenged,” added Ashe.

Golden Gate Capital committed $200 million of equity and mezzanine financing to fund the acquisition and support future growth initiatives. Preferred Unlimited, a real estate and mining investment firm based in Philadelphia, helped source and structure the deal. Deutsche Bank advised Golden Gate Capital on the transaction.

BNP Paribas arranged $102 million senior debt financing and Wachovia provided a $35 million revolving credit facility.

About U.S. Silica

USS is a leading supplier of high quality silica sand and aplite for the oil and gas (frac), glass, foundry, chemical, recreational and construction industries, ground silica for the textile fiberglass and other industries and fine ground silica and kaolin clay products for the paint, plastic and ceramic industries. The company employs 675 people at its 13 facilities in North America.

About Golden Gate Capital

Golden Gate Capital is a San Francisco-based private equity investment firm with approximately $9.0 billion of capital under management. Golden Gate is dedicated to partnering with world-class management teams to invest in change-intensive, growth businesses. The principals of Golden Gate have a long and successful history of investing with management partners across a wide range of industries and transaction types, including leveraged buyouts, recapitalizations, corporate divestures, and buy-and-builds. For more information, visit www.goldengatecap.com.

About Preferred Unlimited

Preferred Unlimited Inc. is a privately held, forward-thinking investment firm that currently owns and operates a diversified portfolio of assets. Specializing in the acquisition of value-add assets, including operating companies, industrial minerals, natural resources, land and commercial real estate, Preferred leverages fundamental market principles to achieve strong rates of return on its investments. The company’s deep investment experience, key relationships with financial institutions and entrepreneurial vision are keystones of the company’s success.