Nuverra Environmental Solutions Stock Rises After Select Energy Services Announced Acquisition

Dec 13, 2021 By MarketDepth

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Nuverra Environmental Solutions, Inc. (NYSE: NES) shares spiked more than 120% on Monday after the provider of sustainable full life cycle water and chemical solutions announced that it has entered into an agreement with Select Energy Services, Inc, according to which Select Energy will acquire Nuverra Environmental Solutions, Inc. for total consideration of approximately $45 million, including the assumption of approximately $20 million of long-term debt, net of cash. Under the terms of the agreement, Nuverra stockholders will receive approximately 4.2 million shares of Select Class A common stock in exchange for all outstanding shares of Nuverra. 

Approved by Board

The transaction was unanimously approved by each of Select’s and Nuverra’s board of directors and is expected to close in the first quarter of 2022, subject to customary closing conditions and the approval of Nuverra’s stockholders. Additionally, Select has entered into a support agreement with holders of Nuverra stock who collectively represent approximately 85% of the outstanding voting shares of Nuverra to approve the transaction.

“We are excited to further expand Select’s world-class sustainable water services and infrastructure footprint through yet another attractive set of consolidation opportunities. These acquisitions represent a continuation of our strategic effort to improve and bolster our base business, advance our technology and diversification efforts, and execute on strategic consolidation opportunities. The Nuverra acquisition will strengthen our geographic footprint with a unique set of water logistics and infrastructure assets, particularly in the Bakken, Haynesville and Northeast, while continuing to expand our production related revenues. Additionally, the acquisition of HB’s onshore operations will add significant asset and regional breadth to our market leading rentals and accommodations business unit within our Water Services segment.”

John Schmitz, Select’s Chairman, President and CEO

“We continue to experience a strong recovery in activity and financial performance in the fourth quarter, buoyed by a robust commodity price environment and our recent acquisitions, and we remain excited about the opportunities that lie ahead in 2022. In total, upon completion of the Nuverra acquisition, we will have added an estimated nearly $300 million of incremental annualized run-rate revenue through M&A since the beginning of the third quarter of 2021. Consistent with our belief that consolidation in the oilfield service markets is a critical avenue to advance profitability in the industry, we also believe there are meaningful cost synergy opportunities to be gained from these acquisitions, including resolving the duplication of public company cost structures with Nuverra. We believe the acquisitions of Nuverra and HB, in conjunction with our other recent acquisitions of Complete, Agua Libre and UltRecovery, position us to see meaningful revenue and earnings growth in the year ahead. Even with this recent activity, we still maintain a strong balance sheet with a meaningful net cash position, backed by incremental revenue and gross profit. Ultimately, we look forward to realizing the benefits of these acquisitions across our scalable platform, and further developing and building upon this diversified portfolio of assets for our shareholders, customers, employees and other partners,” Schmitz explained.