US Silica Holdings Inc. (SLCA) stock prices were down by 8.32% as of the market closing on October 6th 2021. This brought the price per share up to USD$8.48 at the end of the trading day. Subsequent premarket fluctuations have seen the stock surge by 6.84%, bringing it up to USD$9.06.
SLCA Stock’s Alternatives
October 6th 2021 saw SLCA stock announce the initiation of a review of strategic alternatives for its Industrial and Specialty Products (ISP) segment. The company is considering a range of options including, but not limited to, a potential sale or separation of the ISP segment. The company’s Board and management team regularly review strategic opportunities. With the company’s recent equity valuation being closely correlated to the energy markets, it is confident that the time is right to further assess the potential of creating two, focused standalone businesses.
Strength of ISP Segment
Both of the company’s ISP and O&G segments are leaders in their respective industries. It is on the bases of these strengths that the company believes a separation or sale of ISP could potentially unlock significant value and a maximizing of returns for all of its stockholders. The SLCA stock’s ISP segment has developed a market leading portfolio of products, serving several essential, high growth and attractive end markets. These markets include renewable energy, food and beverage, chemical additives, paints and coatings, building products, and others.
The business is positioned adequately to leverage its global sustainability initiatives, poised to benefit from increased U.S infrastructure investment. These potential benefits are further consolidated by increased exposure to environmentally important value chains, including solar panels, wind turbines, and green diesel. SLCA stock’s robust new pipeline of commercial products and clear, comprehensive plan will allow ISP to substantially improve profitability over the next three to five years. Concurrent to the ongoing review, SLCA stock will continue to focus on its strategy of prioritizing free cash flow generation and net debt reduction. The completion of the review of strategic alternatives does not yet have an established specific timeline.
Future Outlook for SLCA Stock
The company is poised to capitalize on the expanded scope of opportunities afforded to it as a result of the strength of its ISP segment. SLCA stock is keen to continue taking measures to usher in unprecedented growth. Current and potential investors are confident that management will be able to continue effectively leveraging the resources at its disposal. This is hoped to facilitate significant and sustained increases in shareholder value.