Atlas Energy Solutions Inc. to Acquire Hi-Crush Inc., Creating the Largest Proppant Producer in the Country and an Industry Leading Logistics Provider

Atlas Energy Solutions Inc. (NYSE: AESI) (“Atlas” or the “Company”) today announced that it has entered into a definitive agreement with Hi Crush Inc. ("Hi-Crush") to acquire all of Hi-Crush’s Permian Basin proppant production assets and North American logistics operations in a transaction valued at $450 million ⁽¹⁾.

The transaction consideration includes $150 million in up-front cash, $175 million in shares of common stock of AESI and $125 million in deferred cash payments in the form of a Seller’s Note. Both the up-front cash consideration and the principal amount of the Seller's Note are subject to revision for customary post-closing adjustments.

Acquisition Highlights

• Combination brings together two of the leading innovators in the Permian proppant space, and two of the largest holders of premium giant open dune sand reserves and resources in the Permian
• Pro forma production capacity expected to be ~28 million tons, with ~80% of pro forma 2024 production capacity contracted, accelerating free cash flow generation and shareholder returns
• Adds ~12 mmtpy of production capacity (~5 million tons in Kermit, TX, proximal to Atlas's existing Kermit facilities and ~7 million tons from OnCore’s distributed mining network) ⁽²⁾
• We expect the acquired assets to contribute $110-125 million in Adjusted EBITDA in 2024, which implies on a full run-rate basis, a valuation of approximately 3x 2024 Adjusted EBITDA.
• Broadens Atlas’s logistics offering through the addition of Pronghorn, a leading multi-basin provider of proppant logistics and wellsite services
• Estimated to be immediately double-digit accretive to CFPS and EPS ⁽³⁾
• Expected to realize more than $20 million in annual synergies by 2026
• Acquisition maintains low and flexible operating cost structure and a strong margin profile
• Combines Atlas’s Delaware Basin-leading logistics offering (Dune Express) with Hi-Crush’s Midland Basin-leading logistics offerings (Oncore + Pronghorn) to drive significant operational efficiencies
• The transaction is expected to close before the end of the first quarter of 2024

Bud Brigham, Executive Chairman and CEO of Atlas commented, "This is a great day for Atlas and Hi-Crush, we are thrilled to bring these two great organizations together. Both companies have led the industry’s innovations to drive efficiencies in proppant and logistics in different but complementary ways, a testament to the high quality people involved. Combining the teams, their technologies and best practices, as well as their complementary geographical footprint, should compound constructively to the benefit of our shareholders. It also furthers our goal to lead the industry in transitioning the Permian, already the premier producing region in the country, to becoming the most efficient and livable energy manufacturing center in the world."