| ACQUISITIONS | NOTE 3—ACQUISITIONS The following table presents key information connected with our 2024, 2023 and 2022 acquisitions (dollars in thousands, except share amounts): Assets and Operations Acquired Acquisition Date Shares Issued Purchase Consideration Acquisition related costs for Asset Acquisitions Value of Shares Issued Total Consideration Segments Eight Smaller Asset Acquisitions Multiple 2024 Dates — $ 14,591 $ 31 — 14,622 Water Infrastructure Bobcat April 18, 2024 — 8,070 — — 8,070 Water Infrastructure Trinity April 1, 2024 — 30,832 — — 30,832 Water Infrastructure Buckhorn March 1, 2024 — 18,781 — — 18,781 Water Infrastructure Iron Mountain Energy January 8, 2024 — 14,000 — — 14,000 Water Infrastructure Tri-State Water Logistics January 3, 2024 — 58,330 — — 58,330 Water Infrastructure Rockies produced water gathering and disposal infrastructure January 1, 2024 — 18,100 — — 18,100 Water Infrastructure Four Smaller Asset Acquisitions Multiple 2023 Dates — 7,293 — — 7,293 Water Infrastructure Asset Acquisition April 3, 2023 — 4,000 — — 4,000 Water Services Asset Acquisition January 31, 2023 — 6,250 150 — 6,400 Water Infrastructure Asset Acquisition December 2, 2022 — 6,000 100 — 6,100 Water Infrastructure Noncontrolling Interests in Big Spring Recycling System December 2, 2022 910,612 22,000 — 7,313 29,313 Water Infrastructure Breakwater November 1, 2022 9,181,144 16,701 — 88,188 104,889 Water Services & Water Infrastructure Cypress November 1, 2022 952,753 — — 9,194 9,194 Water Infrastructure Nuverra February 23, 2022 4,203,323 — — 35,854 35,854 Water Services & Water Infrastructure Total 15,247,832 $ 224,948 $ 281 $ 140,549 $ 365,778 2024 Asset Acquisitions During the year ended December 31, 2024, the Company acquired certain assets and associated liabilities, primarily in the Permian Basin and Northeast Ohio, from eight transactions for $14.6 million inclusive of acquisition-related costs. The allocation of the purchase price for these assets was a combined $8.6 million in property and equipment, $6.0 million in land, $1.5 million in intellectual property, $0.1 million in other long-term assets and $1.6 million in asset retirement obligations and other liabilities. Bobcat Acquisition On April 18, 2024, the Company completed the acquisition of equity interests of certain subsidiaries of Bobcat SWIW Holdings, LLC (the “Bobcat Acquisition”). The Company paid total consideration of $8.1 million at closing. The Bobcat Acquisition strengthened Select’s Marcellus/Utica disposal operations and allows the Company to offer more comprehensive produced water solutions to its customers in the region. The Bobcat Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made estimates, judgments and assumptions. These estimates, judgments, assumptions and valuation of the property and equipment acquired, intangible assets, current assets and current liabilities were finalized as of September 30, 2024. The assets acquired and liabilities assumed are included in the Company’s Water Infrastructure segment. The Company incurred $0.2 million of transaction-related costs related to this acquisition during the year ended December 31, 2024, and such costs are included in selling, general and administrative within the consolidated statements of operations. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition (in thousands): Purchase price allocation Amount Consideration transferred Cash paid $ 8,070 Total consideration transferred 8,070 Less: identifiable assets acquired Working capital (285) Property and equipment 8,291 Customer relationships 535 Long-term ARO (471) Total identifiable net assets acquired $ 8,070 Trinity Acquisition On April 1, 2024, the Company completed the acquisition of Trinity Acquisition Holdings, LLC (d/b/a Trinity Environmental Services) and related entities (the “Trinity Acquisition”). The Company paid initial consideration of $29.4 million at closing and an additional $1.5 million in purchase consideration later in 2024 due to post-closing adjustments. The acquisition strengthened Select’s Permian Basin disposal operations with 22 saltwater disposal wells while also adding one Gulf Coast slurry well and one Midcon region saltwater disposal well. Additionally, the Trinity Acquisition encompasses permits for nine future saltwater disposal well locations, 14 miles of owned pipeline and approximately 79 miles of customer pipeline integrally connected to Trinity’s facilities. These additions allow the Company to offer more comprehensive produced water solutions to its customers in Texas and New Mexico. The Trinity Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made estimates, judgments and assumptions. The Company engaged third-party valuation experts to assist in the purchase price allocation. These estimates, judgments, assumptions and valuation of the property and equipment acquired, intangible assets, current assets and current liabilities and have been finalized as of December 31, 2024. The assets acquired and liabilities assumed are included in the Company’s Water Infrastructure segment and the goodwill acquired is deductible for income tax purposes. The Company incurred $1.8 million and $0.1 million of transaction-related costs related to this acquisition during the year ended December 31, 2024, and during the year ended December 31, 2023, respectively, and such costs are included in selling, general and administrative within the consolidated statements of operations. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition (in thousands): Purchase price allocation Amount Consideration transferred Cash paid $ 30,832 Total consideration transferred 30,832 Less: identifiable assets acquired Working capital (408) Property and equipment 41,706 Right-of-use assets 182 Long-term ARO (10,149) Long-term lease liabilities (499) Total identifiable net assets acquired 30,832 Fair value allocated to net assets acquired $ 30,832 Buckhorn Acquisition On March 1, 2024, the Company completed the acquisition of equity interests of certain subsidiaries of Buckhorn Waste Services, LLC and Buckhorn Disposal, LLC (the “Buckhorn Acquisition”). The Company paid initial consideration of $17.9 million in cash at closing and will pay an additional $0.9 million in cash purchase consideration during 2025 due to post-closing adjustments. The acquisition strengthened Select’s solids waste management capabilities in the Bakken region, adding additional landfills in North Dakota and in Montana to support Select’s existing landfill operations in the region. The Buckhorn Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made estimates, judgments and assumptions. The Company engaged third-party valuation experts to assist in the purchase price allocation. These estimates, judgments, assumptions and valuation of the property and equipment acquired, intangible assets, current assets and current liabilities and have been finalized as of December 31, 2024. The assets acquired and liabilities assumed are included in the Company’s Water Infrastructure segment and a portion of the goodwill acquired is deductible for income tax purposes. The goodwill reflects the strategic benefits of expanding the landfill footprint in the Bakken region and the synergies of integrating our existing assets and activities with Buckhorn’s operations. The Company incurred $0.8 million of transaction-related costs related to this acquisition during the year ended December 31, 2024, The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition (in thousands): Purchase price allocation Amount Consideration transferred Purchase consideration $ 18,781 Total consideration transferred 18,781 Less: identifiable assets acquired and liabilities assumed Working capital 752 Property and equipment 19,665 Customer relationships 4,100 Deferred tax liabilities (2,393) Long-term ARO (6,898) Total identifiable net assets acquired 15,226 Goodwill 3,555 Fair value allocated to net assets acquired $ 18,781 Iron Mountain Energy Acquisition On January 8, 2024, the Company acquired substantially all of the assets and operations of Iron Mountain Energy, LLC (the “Iron Mountain Acquisition”). The Company paid total consideration of $14.0 million at closing. The acquisition strengthened Select’s fluids and solids treatment and disposal assets and operations in the Haynesville region. The Iron Mountain Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made estimates, judgments and assumptions. The Company engaged third-party valuation experts to assist in the purchase price allocation. These estimates, judgments, assumptions and valuation of the property and equipment acquired, intangible assets, current assets, current liabilities and long-term liabilities were finalized as of September 30, 2024. The assets acquired and liabilities assumed are included in the Company’s Water Infrastructure segment and the goodwill acquired is deductible for income tax purposes. The Company incurred $0.5 million and $0.1 million of transaction-related costs related to this acquisition during the year ended December 31, 2024, and during the year ended December 31, 2023, respectively, and such costs are included in selling, general and administrative within the consolidated statements of operations. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition (in thousands): Purchase price allocation Amount Consideration transferred Cash paid $ 14,000 Total consideration transferred 14,000 Less: identifiable assets acquired and liabilities assumed Working capital (3,974) Property and equipment 21,876 Long-term ARO (3,902) Total identifiable net assets acquired 14,000 Goodwill — Fair value allocated to net assets acquired $ 14,000 Tri-State Water Logistics Acquisition On January 3, 2024, the Company acquired the assets and operations of Tri-State Water Logistics, LLC and certain of its affiliates (the “Tri-State Acquisition”). The Company paid total consideration of $58.3 million at closing. The acquisition strengthened Select’s fluids and solids treatment and disposal assets and operations in the Haynesville region. The Tri-State Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made estimates, judgments and assumptions. The Company engaged third-party valuation experts to assist in the purchase price allocation. These estimates, judgments, assumptions and valuation of the property and equipment acquired, intangible assets, current assets, current liabilities and long-term liabilities were finalized as of September 30, 2024. The assets acquired and liabilities assumed are included in the Company’s Water Infrastructure segment and the goodwill acquired is deductible for income tax purposes. The goodwill reflects the strategic benefits of enhancing Select’s fluids and solids treatment and disposal footprint in the Haynesville region and the synergies from integrating Select’s existing assets and operations with Tri-State’s operations. The Company incurred $0.8 million and $1.1 million of transaction-related costs related to this acquisition during the year ended December 31, 2024, and during the year ended December 31, 2023, respectively, The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition (in thousands): Purchase price allocation Amount Consideration transferred Cash paid $ 58,330 Total consideration transferred 58,330 Less: identifiable assets acquired and liabilities assumed Working capital (1,428) Property and equipment 44,613 Right-of-use assets 1,028 Customer relationships 10,240 Long-term ARO (2,569) Long-term lease liabilities (956) Total identifiable net assets acquired 50,928 Goodwill 7,402 Fair value allocated to net assets acquired $ 58,330 Rockies produced water gathering and disposal infrastructure Acquisition On January 1, 2024, the Company acquired certain disposal assets, operations and disposal and recycling permits in the Rockies region (the “Rockies Infrastructure Acquisition”). The Company paid total consideration of $18.1 million at closing. The acquisition strengthened the Company’s water disposal assets and operations in the Rockies region. The Rockies Infrastructure Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made estimates, judgments and assumptions. The Company engaged third-party valuation experts to assist in the purchase price allocation. These estimates, judgments, assumptions and valuation of the property and equipment acquired, intangible assets, current assets, current liabilities and long-term liabilities were finalized as of September 30, 2024. The assets acquired and liabilities assumed are included in the Company’s Water Infrastructure segment and the goodwill acquired is deductible for income tax purposes. The goodwill reflects the strategic benefits of expanding the disposal footprint in the Rockies region and the synergies from integrating our existing assets and activities with the Rockies Infrastructure disposal well and potential to drill more disposal wells on the acquired property. The Company incurred $0.3 million of transaction-related costs related to this acquisition during the year ended December 31, 2024, The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition (in thousands): Purchase price allocation Amount Consideration transferred Cash paid $ 18,100 Total consideration transferred 18,100 Less: identifiable assets acquired and liabilities assumed Working capital (500) Property and equipment 8,266 Customer relationships 8,230 Long-term ARO (471) Total identifiable net assets acquired 15,525 Goodwill 2,575 Fair value allocated to net assets acquired $ 18,100 A summary of the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed as of December 31, 2024 for the Company’s 2024 business acquisitions is located below (in thousands): Purchase price allocation Bobcat Trinity Buckhorn Iron Mountain Energy Tri-State Water Logistics Rockies Infrastructure Total 2024 Acquisitions (in thousands) Consideration transferred Purchase consideration $ 8,070 $ 30,832 $ 18,781 $ 14,000 $ 58,330 $ 18,100 $ 148,113 Total consideration transferred 8,070 30,832 18,781 14,000 58,330 18,100 148,113 Less: identifiable assets acquired and liabilities assumed Working capital (285) (408) 752 (3,974) (1,428) (500) (5,843) Property and equipment 8,291 41,706 19,665 21,876 44,613 8,266 144,417 Right-of-use assets — 182 — — 1,028 — 1,210 Customer relationships 535 — 4,100 — 10,240 8,230 23,105 Deferred tax liabilities — — (2,393) — — — (2,393) Long-term ARO (471) (10,149) (6,898) (3,902) (2,569) (471) (24,460) Long-term lease liabilities — (499) — — (956) — (1,455) Total identifiable net assets acquired 8,070 30,832 15,226 14,000 50,928 15,525 134,581 Goodwill — — 3,555 — 7,402 2,575 13,532 Fair value allocated to net assets acquired $ 8,070 $ 30,832 $ 18,781 $ 14,000 $ 58,330 $ 18,100 $ 148,113 2023 Asset Acquisitions During the year ended December 31, 2023, the Company acquired certain assets, revenue-producing contracts and associated liabilities, primarily in the Permian Basin, from multiple entities for $17.7 million inclusive of $0.2 million of acquisition-related costs. The allocation of the purchase price for these assets was a combined $15.9 million in property and equipment, $1.0 million in water inventory, $1.9 million in customer relationships and $1.1 million in asset retirement obligations and other liabilities. Many of the assets acquired are adjacent to the Company’s Big Spring Recycling System (“BSRS”) in the Permian Basin, with connectivity into BSRS providing future revenue and cost synergies. Breakwater Acquisition On November 1, 2022, the Company completed the acquisition of Breakwater Energy Services, LLC. (“Breakwater”) in a stock-for-stock transaction for total consideration of $105.3 million based on the closing price of the Company’s shares of Class A common stock on October 31, 2022 (the “Breakwater Acquisition”). The consideration transferred consisted of 9,181,144 shares of Class A common stock, $10.5 million of debt that was paid off at closing as part of consideration exchanged, $3.8 million in change-of-control payments and $2.4 million in seller transaction costs. The acquisition strengthened Select’s geographic footprint with a unique set of water logistics and infrastructure assets, particularly in the Permian region. The Breakwater Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made estimates, judgments and assumptions. The Company engaged third-party valuation experts to assist in the purchase price allocation. These estimates, judgments and assumptions and valuation of the property and equipment acquired, intangible assets, current assets, current liabilities and long-term liabilities were finalized as of September 30, 2023. The total consideration paid exceeded the fair value of the net assets acquired by $4.7 million, with the excess recorded as goodwill. The goodwill recognized was driven primarily by the ability to connect Breakwater’s infrastructure with the Company’s infrastructure and expand revenue-producing capabilities and market share. The acquired goodwill is deductible for tax purposes. The assets acquired and liabilities assumed are included in the Company’s Water Services and Water Infrastructure segments. The Company incurred $2.1 million and $2.9 million of transaction-related costs related to this acquisition during the year ended December 31, 2023, and during the year ended December 31, 2022, respectively, and such costs are included in selling, general and administrative within the consolidated statements of operations. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed as of the date of acquisition (in thousands): Purchase price allocation Amount Consideration transferred Class A common stock (9,181,144 shares) (1) $ 88,188 Cash paid 16,701 Total consideration transferred 104,889 Less: identifiable assets acquired and liabilities assumed Working capital 22,444 Property and equipment 69,506 Right-of-use assets 180 Customer relationships 40,060 Other long-term assets 120 Long-term debt (1,979) Long-term lease liabilities (125) Noncontrolling interest (2) (30,000) Total identifiable net assets acquired 100,206 Goodwill 4,683 Fair value allocated to net assets acquired $ 104,889 (1) During the year ended December 31, 2023, the parties agreed that 46,888 shares of Class A common stock would be returned to Select related to working capital adjustments. These shares were cancelled in 2023. (2) The noncontrolling interests acquired on November 1, 2022 were subsequently purchased on December 2, 2022, thereby giving the Company 100% ownership of BSRS. Big Spring Recycling System Noncontrolling Interests In connection with Select’s acquisition of Breakwater on November 1, 2022, Select acquired all noncontrolling interests in the BSRS on December 2, 2022. BSRS includes significant pipeline, storage, recycling and disposal infrastructure assets in the Midland Basin. The consideration paid included $7.3 million based on the closing price of the Company’s shares of Class A common stock on December 1, 2022, and $22.0 million in cash for total consideration of $29.3 million. The consideration transferred included 910,612 shares of Class A common stock. This equity transaction enabled Select to simplify the BSRS operations and decision-making processes and provided potential revenue and cost synergies. This transaction was accounted for primarily as a reduction of noncontrolling interests. 2022 Asset Acquisition On December 2, 2022, the Company acquired certain assets and revenue-producing contracts in the Midland Basin from an entity for $6.1 million inclusive of $0.1 million of acquisition-related costs. The asset acquisition allocation was $3.9 million in property and equipment and $2.2 million in customer relationships. Many of the assets acquired are adjacent to the BSRS, with connectivity into the BSRS providing future revenue and cost synergies. Cypress Acquisition On November 1, 2022, the Company completed the acquisition of certain saltwater disposal assets from Cypress Environmental Solutions, LLC (“Cypress”) for total consideration of $9.2 million based on the closing price of the Company’s shares of Class A common stock on October 31, 2022 (the “Cypress Acquisition”). The consideration transferred consisted of 952,753 shares of Class A common stock. The acquired Cypress operations consist of eight saltwater disposal facilities with daily permitted capacity of 85,000 barrels per day across North Dakota. The acquisition strengthened Select’s geographic footprint with a portfolio of strategic wastewater disposal facilities in the Bakken region, with the majority of Cypress’s volumes being delivered through high volume contracted gathering pipeline infrastructure. The Cypress Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made estimates, judgments and assumptions. These estimates, judgments and assumptions and valuation of the property and equipment acquired, current assets, current liabilities and long-term liabilities were finalized as of March 31, 2023. The assets acquired and liabilities assumed are included in the Company’s Water Infrastructure segment. The Company incurred less than $0.1 million and $0.5 million of transaction-related costs related to this acquisition during the year ended December 31, 2023, and during the year ended December 31, 2022, respectively, and such costs are included in selling, general and administrative within the consolidated statements of operations. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed as of the date of acquisition (in thousands): Purchase price allocation Amount Consideration transferred (in thousands) Class A common stock (952,753 shares) $ 9,194 Total consideration transferred 9,194 Less: identifiable assets acquired and liabilities assumed Working capital (42) Property and equipment 8,192 Customer relationships 3,894 Long-term ARO (2,850) Total identifiable net assets acquired 9,194 Fair value allocated to net assets acquired $ 9,194 Nuverra Acquisition On February 23, 2022, the Company completed the acquisition of Nuverra Environmental Solutions, Inc. (“Nuverra”) for total consideration of $35.9 million based on the closing price of the Company’s shares of Class A common stock on February 23, 2022 (the “Nuverra Acquisition”). The consideration transferred consisted of 4,203,323 shares of Class A common stock. The acquisition strengthened Select’s geographic footprint with a unique set of water logistics and infrastructure assets, particularly in the Bakken, Haynesville and Northeast, while continuing to expand Select’s production-related revenues. Select also acquired a 60-mile underground twin pipeline network in the Haynesville Shale in Texas and Louisiana. This pipeline network is used for the collection of produced water for transport to interconnected disposal wells and the delivery or re-delivery of water from water sources to operator locations for use in well completion activities. Additionally, Nuverra operates a landfill facility in North Dakota located on a 50-acre site. The facility provides a unique opportunity for Select to expand its logistics capabilities into a new service offering. The acquisition resulted in a bargain purchase gain, as Nuverra was experiencing financial distress and actively evaluating strategic alternatives leading up to the transaction. The Nuverra Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made estimates, judgments and assumptions. The Company engaged third-party valuation experts to assist in the purchase price allocation. These estimates, judgments and assumptions and valuation of the property and equipment acquired, current assets, current liabilities and long-term liabilities were finalized as of December 31, 2022. The Nuverra debt, including accrued interest, totaled $18.8 million, and was repaid during the year ended December 31, 2022, after the acquisition was completed. The assets acquired and liabilities assumed are included in the Company’s Water Services and Water Infrastructure segments. The Company incurred $0.7 million and $4.1 million of transaction-related costs related to this acquisition during the years ended December 31, 2023 and 2022, respectively, and such costs are included in selling, general and administrative within the consolidated statements of operations. Further, the Company assumed $1.6 million of severance liabilities in connection with the Nuverra Acquisition, that, outside of a nominal amount were paid in 2022. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed as of the date of acquisition (in thousands): Purchase price allocation Amount Consideration transferred (in thousands) Class A common stock (4,203,323 shares) $ 35,854 Total consideration transferred 35,854 Less: identifiable assets acquired and liabilities assumed Working capital 6,893 Property and equipment 65,780 Right-of-use assets 2,931 Other long-term assets 100 Long-term debt (18,780) Long-term ARO (12,980) Other long-term liabilities (1,439) Total identifiable net assets acquired 42,505 Bargain Purchase Gain (6,651) Fair value allocated to net assets acquired, net of bargain purchase gain $ 35,854 |
