Western Midstream (WES) will grow its water midstream network in the Delaware Basin in a cash-and-equity deal to acquire Aris Water Solutions (ARIS) for $1.5 billion.
The boards of both companies approved the deal, which is expected to close before the end of 2025, the companies said Aug. 6. The deal’s enterprise value was priced by the companies at $2 billion before transaction costs.
Western Midstream owns multiple oil, gas and water midstream assets throughout the western U.S. The acquisition will combine Western’s 830-mile and Aris’ 790-mile produced water network in the Permian Basin. Aris’ assets will extend WES’ footprint into Lea and Eddy counties, New Mexico.
“The combination of our assets creates a leading produced water gathering, disposal and recycling business that can meet the flow assurance needs of customers as they execute on their decades' worth of drilling inventory,” said Oscar Brown, WES president and CEO.
According to the agreement, Western will acquire all outstanding shares of Aris. Aris shareholders will receive 0.625 common units of WES for each Aris share, though shareholders have other options if desired.
“The combination of Aris and WES creates a premier midstream water-solutions provider of scale that is better positioned to deliver a variety of water services, provide critical flow assurance for natural-gas and crude-oil production activities and generate strong returns for our shareholders,” said Aris Water Solutions CEO Amanda Brock in the press release.
BofA Securities provided financial guidance, and Vinson & Elkins gave legal counsel to Western in the acquisition. Citi served as financial adviser and Gibson, Dunn & Crutcher served as legal adviser to Aris.