Western Midstream Completes Acquisition of Aris Water Solutions
Western Midstream Partners, LP (NYSE: WES) has officially completed its acquisition of Aris Water Solutions, Inc. (Aris), marking a significant step in its strategy to strengthen its position in the Delaware Basin as a leading provider of integrated water solutions.
Oscar K. Brown, President and Chief Executive Officer of Western Midstream, expressed enthusiasm about the acquisition, stating, “I am pleased to announce the completion of WES’s acquisition of Aris Water Solutions, solidifying our position as one of the largest three-stream midstream, flow-assurance providers in the Delaware Basin. We are thrilled to welcome the Aris employees to the WES team and look forward to growing the combined entity into the leading integrated water solutions provider in the basin. Together, WES and Aris create a stronger, more agile enterprise, well-positioned to meet the challenges facing our producer customers in Texas and New Mexico with respect to produced-water gathering, recycling, transportation, disposal, and beneficial reuse.”
The merger was structured under a carefully negotiated agreement that provided Aris shareholders with several options for the consideration they would receive. Each share of Aris Class A common stock, along with each unit of Aris Water Holdings, LLC and corresponding Class B common stock (collectively referred to as Aris OpCo Stapled Units), was convertible into Merger Consideration from WES. Shareholders could choose between three alternatives:
- Common Unit Election Consideration: Shareholders could receive 0.625 common units of WES, representing limited partner interests.
- Cash Election Consideration: Shareholders could elect to receive $25.00 in cash per share/unit, subject to proration.
- Mixed Election Consideration: Shareholders could opt for a combination of 0.450 common units and $7.00 in cash per share/unit.
The final election results revealed diverse preferences among Aris securityholders. A total of 14,385,652 shares and units elected the Common Unit Election Consideration, including those securityholders who did not make an election before the deadline and were automatically deemed to have chosen this option.
The largest group, representing 33,801,151 shares and units, elected the Cash Election Consideration. Due to the proration mechanism outlined in the merger agreement, these shareholders will receive approximately $10.00 in cash and 0.375 common units per share/unit. Meanwhile, 11,017,951 shares and units chose the Mixed Election Consideration, receiving both cash and equity according to the defined ratio.
Overall, the merged entity will distribute approximately 28% of the total consideration in cash and the remaining 72% in equity. The total cash outlay for the transaction is $415.0 million, while the equity component will comprise roughly 26.6 million common units of WES.
This acquisition is expected to enhance Western Midstream’s operational capabilities by combining Aris’s water infrastructure with WES’s existing midstream operations. By integrating produced-water gathering, recycling, transportation, disposal, and beneficial reuse services, the combined entity aims to offer more comprehensive, efficient, and cost-effective solutions to producers operating in the Delaware Basin.
Furthermore, the merger positions Western Midstream as a more resilient and agile midstream operator. With the expanded workforce, additional assets, and strengthened service capabilities, the company anticipates being able to respond more effectively to market dynamics and customer needs, ultimately driving long-term growth and value for its stakeholders.
The integration of Aris’s operations into WES is part of the company’s broader strategic objective to become the leading three-stream midstream service provider in the region. By leveraging the combined expertise and resources of both organizations, WES plans to enhance service reliability, optimize logistics, and develop innovative solutions for the sustainable management and beneficial reuse of produced water.
