Business Context and Reporting Period
This Form 8-K, dated July 19, 2017, reports on Select Energy Services, Inc. (the "Company"), a Delaware corporation. The filing details the entry into a Material Definitive Agreement on July 18, 2017, regarding a proposed merger with Rockwater Energy Solutions, Inc. ("Rockwater"). The Company is classified as an emerging growth company.
Key Financial Metrics
This filing is a current report regarding a corporate transaction and does not contain periodic financial statements. Consequently, specific values for revenue, profit, cash flow, margins, debt, and liquidity are not provided in this document.
Material Changes and Transaction Details
The primary material change is the execution of a Merger Agreement for a stock-for-stock transaction between Select and Rockwater.
- Transaction Structure: Select will merge with Rockwater. Rockwater will become a wholly-owned subsidiary of Select.
- Exchange Ratio: Holders of Rockwater common stock will receive 0.7777 shares of Select common stock for each share of Rockwater stock held.
- Pro Forma Ownership: Upon consummation, current Select stockholders are expected to own approximately 64.4% of the combined company, while current Rockwater stockholders will own approximately 35.6%.
- Stockholder Approval: Written consents were obtained from approximately 61.5% of Select stockholders and 53.2% of Rockwater stockholders, making further stockholder approval unnecessary.
- Leadership Changes: John Schmitz (Select CEO) will become Executive Chairman. Holli C. Ladhani (Rockwater CEO) will become President and CEO of the combined company.
Guidance, Outlook, Risks, and Contingencies
Closing Conditions: The transaction is subject to several conditions, including the mailing of an information statement to Select stockholders, NYSE listing authorization, expiration of the Hart-Scott-Rodino waiting period, and the divestiture of certain specified businesses by Rockwater.
Termination: The agreement may be terminated if the merger is not consummated by November 1, 2017, subject to extensions to December 31, 2017, or March 31, 2018. No termination fees are payable.
Risks: The filing includes a cautionary statement regarding forward-looking statements, noting that actual results may differ due to risks outlined in the Company's April 24, 2017 IPO prospectus.
Investor Verification Checklist
- Verify the final pro forma ownership percentages (64.4% Select / 35.6% Rockwater) in the definitive proxy or information statement.
- Confirm the specific businesses Rockwater is required to divest as a closing condition.
- Review the full text of the Merger Agreement (Exhibit 2.1) for detailed representations, warranties, and covenants.
- Monitor the status of regulatory approvals, specifically the Hart-Scott-Rodino waiting period and NYSE listing authorization.
- Check for any updates regarding the termination date extensions (Nov 1, Dec 31, or Mar 31).