Business Context and Reporting Period
This Form 8-K Current Report was filed by Select Energy Services, Inc. on December 29, 2017. The filing discloses the termination of two material definitive agreements entered into on the same date.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The only financial data disclosed relates to transaction costs:
- Termination Fee (Crestview): Approximately $0.6 million.
- Termination Fee (B-29): Approximately $0.6 million.
- Total Immediate Cash Outflow: Approximately $1.2 million.
Material Changes
The Company exercised its right to terminate two Management Services Agreements (MSAs) originally dated December 19, 2016:
- Crestview Termination: Terminated the MSA with Crestview Advisors, L.L.C. (the Company's private equity sponsor and manager of funds holding the largest equity interest in SES Legacy Holdings, LLC). Directors Robert V. Delaney and Adam J. Klein are employed by Crestview Partners.
- B-29 Termination: Terminated the MSA with B-29 Investments, LP, which is controlled by Executive Chairman John D. Schmitz.
- Legal Effect: Both agreements include a mutual release of any and all claims arising out of the respective MSAs or acts/omissions relating to them.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management commentary on future operations, or specific risk factors beyond the disclosure of the terminated agreements. The primary contingency noted is the payment of the termination fees to effectuate the mutual release of claims.
Investor Verification Checklist
- Verify the total cash impact of the $1.2 million in termination fees against the Company's current liquidity position.
- Confirm the operational impact of ending management services with Crestview Advisors and B-29 Investments, given their ties to major stockholders and the Executive Chairman.
- Review the full text of the Termination Agreements (Exhibits 10.1 and 10.2) to understand the scope of the mutual release of claims.
- Assess whether the termination of these MSAs alters the Company's governance structure or strategic direction.