Select Water Solutions Announces Agreement to Acquire Pilot Water Solutions

Deal terms and timing

Select will acquire Pilot Water on a debt-free basis for aggregate consideration of $700 million, comprised of $600 million of cash and $100 million of Class A common stock, with an additional potential $15 million contingent cash payment tied to operational milestones expected in early 2027. The transaction is currently expected to close in the fourth quarter of 2026, subject to customary closing conditions and regulatory approvals, including the Hart-Scott-Rodino waiting period. Select stated the number of shares issued will be determined by dividing $100 million by the 30-day volume-weighted average price of Select's Class A common stock immediately prior to closing. (Source: S1)

Sources: S1

Assets, contracts and operational footprint

Pilot Water's platform includes 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. Select said Pilot Water has approximately 480,000 barrels per day of minimum volume commitment contracts and 306,000 acres dedicated under long-term agreements. The combined Select and Pilot platforms are presented as a network with more than 2.5 million barrels per day of produced water handled projected in 2027 and, on a combined basis, 3.8 million barrels per day of recycling capacity and 4.8 million barrels per day of combined active and undeveloped permitted disposal capacity. (Source: S1)

Sources: S1

Projected financials and synergies

Select reported Pilot Water is expected to generate $100 - $110 million of 2026 Adjusted EBITDA and $120 - $130 million of 2027 Adjusted EBITDA. Select is targeting an additional $10 to $15 million of annual cost synergies incremental to the 2027 forecast, expected to be achieved in the next 12 to 18 months. Select also stated pro forma net leverage is expected to be less than 2.0x at closing. (Source: S1)

Sources: S1

Financing and advisors

Select entered into debt commitment letters with J.P. Morgan Chase Bank, N.A. and Bank of America to provide financing sufficient to fund the acquisition, subject to customary conditions. J.P. Morgan Securities LLC and BofA Securities, Inc. acted as financial advisors to Select and Vinson & Elkins LLP is serving as legal counsel. (Source: S1)

Sources: S1

Why it may matter (Inference)

If completed as described by Select's disclosure, the transaction would substantially expand Select's Delaware Basin infrastructure, increase its contracted MVC exposure and shift a larger share of pro forma profitability toward Water Infrastructure by 2027. The company frames the deal as enhancing visibility into produced water volumes handled and creating opportunities for interconnection, recycling and disposal optimization across a larger footprint. These are company assertions and contingent on integration and realization of targeted synergies. (Source: S1)

Sources: S1

What remains uncertain

• All forward-looking amounts and timelines (including closing in the fourth quarter of 2026, $120 - $130 million of 2027E EBITDA, $10 – $15 million of targeted cost synergies, and pro forma net leverage of less than 2.0x) are company projections and are subject to customary closing conditions, regulatory approvals and realization risk as described by the issuer.
• Transaction financing is described as subject to customary conditions under debt commitment letters and Select's stated funding sources may change depending on market conditions; the press release does not provide independent verification of financing availability.
• Operational and revenue synergies, the timing of achieving $10 to $15 million of cost synergies, and the satisfaction of earnout milestones for the additional $15 million contingent payment are projections by Select and are not independently verified in the disclosure.