Select Water Solutions Shares Surge on $700 Million Pilot Water Deal

Select Water Solutions (NYSE: WTTR) shares jumped sharply in after-hours trading Thursday after the company announced a definitive agreement to acquire Pilot Water Solutions LLC in a deal valued at $700 million, with an additional $15 million in potential contingent consideration.

The transaction includes $600 million in cash and $100 million in Select Water Class A common stock. Select will acquire Pilot Water, a privately held water midstream operator focused primarily on the Delaware Basin, on a debt-free basis.

Pilot Water operates roughly 2.7 million barrels per day of active permitted disposal capacity and another 900,000 barrels per day of undeveloped permitted capacity. Its infrastructure network spans more than 700 miles of pipelines. The company's contracts include minimum volume commitments totaling 480,000 barrels per day and approximately 306,000 dedicated acres under long-term agreements.

Select Water expects the acquisition to contribute between $120 million and $130 million of EBITDA in 2027, excluding an additional $10 million to $15 million in targeted cost synergies. Pilot Water is projected to generate adjusted EBITDA of $100 million to $110 million in 2026.

The acquisition will significantly expand Select Water's infrastructure business. By 2027, its Water Infrastructure segment is expected to account for approximately 70% of pro forma profitability, while the combined platform is projected to handle more than 2.5 million barrels per day of produced water.

Select Water said it expects pro forma net leverage to remain below 2.0 times at closing. The company plans to finance the cash portion using available cash, committed debt facilities and potentially other debt financing depending on market conditions.

The Pilot Water acquisition is expected to close in the fourth quarter of 2026, subject to customary conditions and regulatory approvals, including clearance under the Hart-Scott-Rodino Act.

WTTR shares closed Thursday at $19.53, up 1.24%, before climbing to $22.29 in after-hours trading, a gain of more than 14%.