Select Energy Services Inc. recently agreed to acquire Nuverra Environmental Solutions Inc. for total consideration of approximately $45 million, capping off a series of M&A activity by the water management company this year.

“We are excited to further expand Select’s world-class sustainable water services and infrastructure footprint through yet another attractive set of consolidation opportunities,” John Schmitz, Select’s chairman, president and CEO, commented in a company release on Dec. 13.

According to the release, Select also closed on the acquisition on Dec. 3 of the U.S. onshore rentals and accommodations operations of HB Rentals LC, a subsidiary of Superior Energy Services Inc. with current operations in the Permian, Haynesville, Midcontinent, Northeast and Rockies regions. In consideration for this acquisition, Select issued 1.2 million shares of Class A common stock and paid $1.5 million in cash, subject to standard post-closing adjustments, to Superior to close the transaction.

These transactions, preceded by acquisitions of Agua Libre Midstream in October and Complete Energy Services in July, build upon Select’s recent M&A strategy of consolidating sizable existing infrastructure portfolios, Schmitz added in the Dec. 13 release.

“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,” he said. “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.”

Headquartered in Houston, Nuverra is an energy-focused environmental solutions company, providing comprehensive, full-cycle environmental solutions, including the removal, treatment, recycling, transportation and disposal of restricted solids, fluids and hydrocarbons for E&P companies operating across the U.S., including in the Bakken, Haynesville, Marcellus and Utica shale plays.

With the Nuverra transaction, Select will be adding more than 300,000 bbl/d of permitted daily disposal capacity in Texas, Louisiana, North Dakota, Montana and Ohio. When combined with existing assets and its other recent acquisitions, this brings Select’s company-wide permitted daily disposal capacity to approximately 2.5 million bbl/d, according to Schmitz.

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. The total consideration of the transaction includes the assumption of approximately $20 million of long-term debt, net of cash.

The transaction was unanimously approved by each of Select’s and Nuverra’s board of directors and is expected to close  first-quarter 2022, subject to customary closing conditions and the approval of Nuverra’s stockholders.

Vinson & Elkins LLP is providing legal counsel to Select in connection with the Nuverra acquisition. Energy Capital Solutions LLC is financial adviser to Select in connection with the acquisition.

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