Select Water stock surges 28% on Pilot Water acquisition deal

Investing.com -- Select Water Solutions, Inc. (NYSE: WTTR) shares rose 20% in after-hours trading Thursday following the announcement of a definitive agreement to acquire Pilot Water Solutions LLC for $700 million, plus $15 million of potential contingent consideration.

The transaction consists of $600 million in cash and $100 million in Class A common stock. Select will acquire Pilot Water, a private water midstream company with primary operations in the Delaware Basin, on a debt-free basis.

Pilot Water operates approximately 2.7 million barrels per day of active permitted disposal capacity, 0.9 million barrels per day of undeveloped permitted disposal capacity, and more than 700 miles of pipeline infrastructure. The company's contract portfolio includes 480,000 barrels per day of minimum volume commitments and 306,000 acres dedicated under long-term agreements.

The acquisition is expected to add $120 million to $130 million of 2027 EBITDA, before considering $10 million to $15 million of additional targeted cost synergies. Pilot Water is projected to generate $100 million to $110 million of 2026 Adjusted EBITDA.

Following the acquisition, Select's Water Infrastructure segment is projected to represent approximately 70% of the company's pro forma profitability by 2027. The combined water infrastructure platform will handle more than 2.5 million barrels per day of produced water during 2027.

The transaction is expected to preserve a strong balance sheet, with pro forma net leverage of less than 2.0x at closing. Select plans to fund the cash portion with cash on hand, borrowings under committed debt financings, and potentially other debt financing depending on market conditions.

The deal is expected to close in the fourth quarter of 2026, subject to customary closing conditions and regulatory approvals, including under the Hart-Scott-Rodino Act.

Original Article

You May Also Be Interested In

• Hafnia stock falls after increasing stake in Torm to 19.85%
• Piper Sandler cuts Rollins to Neutral, citing AI search disruption
• Gaming stocks fall after Meta unveils AI game-building tools