Select Water Solutions Acquires Pilot Water Solutions in $700M Deal

By Tamara Parker • Friday, September 25 10:47 • Permanent Link

Select Water Solutions said it agreed to buy Pilot Water Solutions in a $700 million deal, made up of $600 million in cash and $100 million in Select Class A common stock, plus up to $15 million in contingent cash tied to operational milestones.

Pilot Water brings a large Delaware Basin footprint, including about 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. It also has more than 80% of annual revenue backed by long-term contracts with an average tenor of more than seven years.

The company said Pilot Water has roughly 480,000 barrels per day of minimum volume commitment contracts and 306,000 dedicated acres. A newly signed 175,000-barrel-per-day MVC contract is expected to lift Pilot Water’s daily produced water volumes handled from about 850,000 barrels per day in the first half of 2026 to about 1 million barrels per day in 2027.

For 2026, Pilot Water is expected to generate $100 million to $110 million of adjusted EBITDA, rising to $120 million to $130 million in 2027. Select said it is also targeting another $10 million to $15 million in annual cost synergies over the next 12 to 18 months.

On a combined basis, Select said the new platform would include 3.8 million barrels per day of recycling capacity, 4.8 million barrels per day of combined active and undeveloped permitted disposal capacity, more than 1,600 miles of pipelines, and about 57.0 million barrels of treated and produced water storage capacity.

Select said the combined contract portfolio would include more than 600,000 barrels per day of MVC commitments and about 3.6 million acres under dedication or ROFR dedication, with a weighted average remaining tenor of about 9 years. It also said total produced water volumes handled would grow to more than 2.5 million barrels per day during 2027.

The company said water infrastructure is expected to account for about 70% of its pro forma profitability by 2027. It also said pro forma net leverage is expected to be less than 2.0x at closing. As a result of these announcements, the company's shares have moved 1.24% on the market, and are now trading at a price of $19.53. For more information, read the company's full 8-K submission here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.