WTTR Select Energy Services Inc - Ordinary Shares - Class A

$WTTR Select Water agreed to buy Pilot Water Solutions for 700M, mostly cash. The stock ran about 13% after hours Thursday to roughly 22.20. Pilot is a private water midstream platform in the Delaware Basin: about 2.7 million barrels a day of permitted disposal capacity, another 0.9 million permitted but undeveloped, and 700+ miles of pipeline. More than 80% of its revenue sits on long-term contracts averaging over 7 years, backed by 480K bpd of minimum volume commitments. The math is what caught me. Pilot is expected to do 100-110M of EBITDA this year and 120-130M next year, plus 10-15M in synergies. That puts the deal around 6.5x this year's number, falling toward 5x on next year's. The bigger shift is the mix. Water infrastructure would be about 70% of Select's pro forma profitability by 2027. This is a services company buying its way into being a midstream company.

Select Water Solutions announced a definitive agreement to acquire privately held Pilot Water Solutions for $700 million, plus up to $15 million in potential contingent consideration. The transaction includes $600 million in cash and $100 million in Class A common stock. Pilot Water, a debt-free midstream water infrastructure company focused on the Delaware Basin, operates about 2.7 million barrels per day of permitted active disposal capacity, 0.9 million barrels per day of permitted undeveloped capacity and more than 700 miles of pipelines. Its contracts include 480,000 barrels per day of minimum-volume commitments and 306,000 dedicated acres under long-term agreements. The acquisition is expected to contribute $120 million-$130 million of 2027 EBITDA, plus $10 million-$15 million in anticipated cost synergies. Pilot Water is projected to generate $100 million-$110 million of adjusted EBITDA in 2026. $WTTR

$WTTR Select Water Solutions Announces Agreement To Acquire Pilot Water Solutions "Transaction consideration to consist of a combination of $600 million of cash and $100 million of Class A common stock, with $15 million of potential earnout cash consideration Adds an estimated $120 - $130 million of 2027E EBITDA, before considering $10 – $15 million of additional targeted cost synergies"