Fairmount Santrol lowered the price of its initial public offering of 25 million shares of stock to $16 per share on the New York Stock…
Fairmount Santrol lowered the price of its initial public offering of 25 million shares of stock to $16 per share on the New York Stock Exchange Friday, roughly half of its original plan to raise $1 billion, according to The Wall Street Journal.
FMSA, a marriage of Geauga-based Fairmount Minerals Ltd. and Santrol Inc. of Sugar Land, Texas, had been expected to offer 44.5 million shares for $21 to $24 per share, according to a column by Tom Knox in Monday’s Columbus Business First publication.
But when the IPO occurred Friday, shares, value and expectations were cut in half due to the market, according to a company spokesperson.
Knox called the downsizing a disappointment, but an FMSA spokesperson said the move was necessary.
“We are appreciative of the interest we are seeing in Fairmount Santrol and we are pleased to have priced our offering,” the release stated. “While we chose to downsize the offering given challenging market conditions, we look forward to proceeding as a public company with a focus on providing a unique value proposition to our customers, maximizing value for our shareholders, and continuing our commitment to sustainable development.”
As of Monday, FMSA was trading at $16.09 per share and had garnered about $400 million, according to the WSJ.
Fairmount Minerals Ltd., which moved its international headquarters to an 11,000-square-foot facility at 8844 Mayfield Road in Chester Township in early 2013, mines sand in Munson Township off state Route 44.
Fairmount processes its sand for a variety of purposes at various locations.
In 2010, FML established a new subsidiary, Fairmount Water Solutions, to produce an engineered ceramic filtration media in Newbury Township in partnership with next-door neighbor Kinetico.
Santrol Inc., formed in 1970, sells pre-cured, resin-coated proppants for wellheads around the world, according to Bloomberg Business Week.
A proppant is a solid material, typically treated sand or man-made ceramic materials, designed to keep the cracks in shale that are created by fracking open during or following the fracturing treatment, according to online sources.
Fairmount Minerals was formed in 1986 by Bill Conway, owner of Best Sand Corporation, and Chuck Fowler of Wedron, Ill., and has grow to include more than 750 different mining, processing, research and development, and administrative facilities in the U.S., China, Canada, Denmark and Mexico, said a Baldwin Wallace University abstract published on the university website. Products are sold and shipped globally.
Santrol, listing 10-20 employees and sales of $1 million to $5 million a year, issued a press release in January 2014 announcing the opening of its seventh transportation terminal in the Eagle Ford shale drilling formation in Texas, according to Cotera Business Directory online.
Geauga Growth Partnership, Inc. President Tracey Jemison said he will be watching the FMSA stock and the corporation’s progress.
“It’s a great company. We’re very glad it’s located in Geauga County,” he said. “They provide one of the best sand proppants for the fracking industry.”
