[UPDATE 02-23-22 – The deal has now closed.]
Select Energy Services has agreed to acquire another Houston-based company, Nuverra Environmental Services for $45 million in an all-stock transaction. In addition, Select will also assume $20 million of debt that Nuverra has.
Both companies are involved in the water treatment, recycling and disposal of water and chemicals produced on onshore shale basins in the US. Nuverra primarily operates in Bakken, Haynesville and the Marcellus basins.
The signs have been there that Nuverra was preparing itself to be sold, namely;
- The company moved its head office from Arizona to Houston in August 2021.
- Eric Bauer was hired in April 2020 on a three-year contract as interim CFO. He has an investment banking background.
- Two investment firms (Gates and Ascribe) own 85% of the equity following the company’s bankruptcy reorganization in 2017.
Pat Bond was appointed CEO in April 2021. He abruptly left in September. Current chairman and former CEO Charles Thompson took over as CEO again.
Nuverra has revenues of approximately $100 million and has only generated an operating profit once (in 2014) in the past 11 years. In its bankruptcy reorganization, the company converted more than $400 million of debt into equity. Since exiting bankruptcy, Nuverra has cumulative losses of $225 million.
The transaction is expected to close in the first quarter of 2022.