Atlas Energy Solutions, Inc. (AESI proposed), a profitable frac sand mining and transport company that serves the oil and gas industry, disclosed its IPO’s terms – 18 million shares at a $20.00-to-$23.00 price range to raise $387 million – in an S-1/A filing today (Tuesday, Feb. 28, 2023). The pricing date is next week – Wednesday night (March 8, 2023) to trade Thursday (March 9) on the New York Stock Exchange.
If priced at the $21.50 mid-point, Atlas Energy Solutions would have a market capitalization of about $2.2 billion.
Goldman Sachs, BofA Securities, Piper Sandler, RBC Capital Markets, Barclays, Citigroup, Raymond James and Johnson Rice & Co. are the joint book-runners of Atlas Energy’s IPO.
For the year ended Dec. 31, 2022, Atlas Energy Solutions reported net income of $217.01 million on revenue of $482.72 million.
“Just look at the profits,” a seasoned IPO investor says. “You don’t see a ratio like that too often.”
Atlas Energy Solutions, based in Austin, Texas, describes itself as “a leading provider of proppant (frac sand) and logistics services to the oil and natural gas industry within the Permian Basin of West Texas and New Mexico, the most active oil and natural gas basin in North America,” according to the prospectus.
“We believe we have developed a strong brand recognition for reliability and strong customer service that has enabled us to increase the volume of proppant sold every year since the founding of the company in 2017,” the prospectus says.
Atlas Energy Solutions says it is expanding its business beyond proppant sales. It’s planning to build the Dune Express, the first long-haul overland conveyor system to deliver proppant. This system will cut the distance that proppant needs to travel by truck. It will also remove a significant number of trucks from public roadways within the Permian Basin, according to the prospectus.
“We expect the Dune Express to make public roadways safer by removing trucks from public roadways, thus reducing traffic, accidents and fatalities on public roadways in the region,” the company says.
The Dune Express will cost about $400 million. Atlas Energy Solutions plans to use part of the IPO’s net proceeds to fund the construction of the Dune Express. The company expects to break ground on the project in the first half of 2023. Commercial service is likely to begin by the end of 2024.
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