Business Context and Reporting Period
This Form 8-K Current Report was filed by Select Energy Services, Inc. (not Select Water Solutions, Inc.) on April 26, 2017, regarding events occurring on April 20, 2017. The Company is a Delaware corporation and an emerging growth company. The filing primarily reports the entry into a material definitive agreement for an initial public offering (IPO) of Class A common stock.
Key Financial Metrics and Transaction Details
- Offering Size: 8,700,000 shares of Class A Common Stock.
- Offering Price: $14.00 per share to the public.
- Net Proceeds: Approximately $111.4 million (net of underwriting discounts, commissions, and estimated offering expenses).
- Over-Allotment Option: Underwriters granted a 30-day option to purchase up to 1,305,000 additional shares.
- Closing Date: April 26, 2017.
Material Changes and Use of Proceeds
The Company intends to contribute all net proceeds to SES Holdings, LLC. The proceeds are allocated as follows:
- $34 million: Repayment of borrowings under the credit facility used to fund the cash portion of a recent Permian Basin acquisition.
- $7.8 million: Cash settlement of outstanding phantom units at SES Holdings.
- Approximately $70 million: 2017 budgeted capital expenditures, including approximately $5 million for the expansion of Bakken pipeline systems.
Guidance, Outlook, and Risks
The filing does not provide specific financial guidance, revenue forecasts, or profit margins. It notes that the Underwriting Agreement contains customary representations, warranties, and indemnification provisions. The Company has agreed to indemnify the underwriters against certain liabilities under the Securities Act. The filing references a press release (Exhibit 99.1) for further details on the pricing announcement but does not include management commentary on future operational outlook within this text.
Investor Verification Checklist
- Verify the exact amount of the over-allotment option exercised, if any, as the filing only reports the initial 8,700,000 shares.
- Confirm the specific terms of the credit facility being repaid with the $34 million allocation.
- Review the full text of the Underwriting Agreement (Exhibit 1.1) for lock-up periods and specific indemnification liabilities.
- Examine the Prospectus (filed April 24, 2017) for detailed risk factors and the complete capital expenditure budget.
- Clarify the discrepancy between the company name in the metadata ("Select Water Solutions") and the registrant name in the filing ("Select Energy Services").