#United States #Acquisition #Gainesville #Select Water #Pilot Water

Select Water Solutions Completes Acquisition of Pilot Water Solutions

Select Water Solutions, Inc., a prominent player in the water and chemical solutions sector serving the energy industry, has officially closed its acquisition of Pilot Water Solutions LLC, a recognized midstream water company focused on operations in the Delaware Basin. Announced on November 2, 2026, this strategic move solidifies Select's position as a leading water midstream provider in the region, enabling them to manage the increasing volumes of produced water more effectively. With Pilot Water’s established capabilities, Select aims to enhance its operations and service offerings.

Details of the Transaction

The acquisition took place on a debt-free basis, with Select agreeing to pay approximately $700 million. This included $600 million in cash at closing, along with over 5 million shares of Select’s Class A common stock. Notably, the agreement features a contingent payment of $15 million to one of the sellers, contingent on achieving certain operational milestones expected in early 2027. An additional true-up payment provision ensures the seller is compensated if the market price of Select’s stock drops below a specified level six months post-closing.

John Schmitz, Chairman of the Board, President, and CEO of Select Water Solutions, expressed enthusiasm about welcoming Pilot Water's team to the Select family. This integration is seen as a key driver to bolster Select's existing infrastructure, licensed water resources, and recycling capabilities. Schmitz stated, “We look forward to integrating our industry-leading recycling business and our comprehensive disposal platform in the Delaware Basin.”

Enhancing Capabilities and Future Growth

The significance of this acquisition is manifold, leveraging Pilot Water's robust contractual revenue base, considerable operational capacity, and reserved undeveloped resources. By integrating these assets with Select's own extensive acreage commitments, the company expects not just immediate benefits but also long-term growth opportunities.

The expansion of Select's operational footprint within the Delaware Basin formulates a strategic pathway to tackle the industry's growing challenges related to produced water management. By enhancing their lifecycle water solutions, Select strengthens its ability to cater to customer needs, ensuring reliability and sustainability in water services.

Financial Structures and Sustainability Focus

As part of the acquisition's financial structure, a new credit agreement providing a revolving credit facility of $500 million was activated, replacing Select’s previous sustainability-linked senior secured credit facility. This financial maneuver not only augments their operational liquidity but also demonstrates a commitment to supporting sustainable practices.

Select Water Solutions' mission revolves around offering environmentally sound solutions that prioritise safety and responsible management of water produced in energy operations. The acquisition aligns perfectly with this goal, as Pilot Water's advanced practices complement Select's sustainability ethos.

Looking Ahead

In summary, the acquisition of Pilot Water Solutions marks a pivotal enhancement for Select Water Solutions, positioning them at the forefront of the water midstream sector in the Delaware Basin. With the integration underway and shared resources on the horizon, Select is set to redefine the water management landscape in the energy sector while driving value creation for its clients. The firm’s continued focus on sustainable practices in water and chemicals is anticipated to yield significant outcomes as they navigate the complexities of the industry.

For continued updates and more information about Select Water Solutions, please visit their official website here.