Shares of the Nuverra Environmental Solutions, Inc. (NES) stock were rising in the premarket today on December 14, 2021. NES stock price saw a push of 19.33% to reach $2.16 a share at the time of this writing. The stock was also green in the previous trading session and went up by 30.22% at closing. Let’s discuss the reason behind this bull.
What’s Happening?
NES stock has captivated the attention of investors after the news appeared that the Select Energy Services, Inc. signed an agreement to acquire Nuverra Environmental Solutions, Inc. The total consideration for this deal is roughly $45 million which also includes an assumption of $20 million of long-term debt, net of cash. According to the agreement, NES stockholders will get 4.2 million shares of class A common stock of Select in exchange for all Nuverra outstanding shares.
Both Nuverra and Select’s board of directors have unanimously approved the transaction. After meeting the customary closing conditions and NES stockholders’ approval, the transaction is expected to end in the first quarter of the upcoming year.
For the approval of this transaction, Select has signed a support agreement with holders of NES stock who accumulatively represent 85% of the outstanding voting shares of NES stock.
Financial View of NES stock:
- In the second quarter of 2021, Nuverra stock generated $24.8 million in revenue, $0.3 million higher than the same prior-year period. However, in the first half of 2021, the revenue declined by $14 million as compared to the same tenure of the previous year. This decline is mainly attributable to the Covid-19 which led to the lower drilling and completion activity in the Rocky Mountain and Northeast divisions.
- The company suffered a net loss of $3.9 million in the last reported quarter. In the second quarter of 2020, the net loss was $6.8 million.
- Adjusted EBITDA loss in the second quarter was $0.2 million for NES stock. This compares to Adjusted EBITDA profit of $2.5 million in the same period of the previous year.
- Gross capital expenditures in the first six months of 2021 were $1.6 million
- The company ended the second quarter with $12.4 million available total liquidity.
Wrap Up:
For a couple of days, NES stock is making gains in the stock market. The acquisition of Nuverra by Select is a positive sign for both companies and hence proved to be fruitful in the future. NES stock has lost 16.20% in the last six months and almost 13% year to date.
