Core Viewpoint - Western Midstream Partners, LP ("WES") is acquiring Aris Water Solutions, Inc. ("Aris") in a transaction valued at approximately $1.5 billion, which includes both equity and cash components [1][2]. Transaction Details - The acquisition involves Aris shareholders receiving 0.625 common units of WES for each Aris share, with an option for $25.00 per share in cash, subject to proration, with a maximum cash consideration of $415 million [1][9]. - The total enterprise value of the transaction is approximately $2.0 billion before transaction costs [1]. - The transaction is expected to close in the fourth quarter of 2025, pending regulatory and shareholder approvals [2]. Strategic Rationale - The merger is aimed at creating a leading produced-water gathering, disposal, and recycling business, enhancing WES's ability to meet customer needs in the Delaware Basin [5][6]. - The integration of Aris's assets will expand WES's footprint into Lea and Eddy Counties, New Mexico, unlocking new throughput opportunities across its natural gas, crude oil, and produced water businesses [3][6]. - The combined infrastructure will create a fully integrated produced-water value chain, enhancing WES's competitive position in the market [6]. Financial Implications - The transaction is expected to be accretive to WES's 2026 Free Cash Flow per unit and represents an approximate 7.5x multiple on consensus 2026 EBITDA, including estimated cost synergies [6]. - WES is targeting $40 million in estimated annualized cost synergies from the acquisition [6]. Operational Enhancements - Aris's full-cycle water infrastructure includes approximately 790 miles of produced-water pipeline and significant handling and recycling capacities, which will complement WES's existing operations [3]. - The acquisition will diversify WES's customer base through Aris's long-term contracts and minimum-volume commitments with investment-grade counterparties [6][7]. Leadership Commentary - WES's CEO expressed excitement about the strategic combination, emphasizing the alignment with WES's strategy of acquiring high-quality midstream assets [4]. - Aris's CEO highlighted the transaction as a significant milestone, positioning the combined entity as a premier midstream water-solutions provider [8].