Delek Closes $285 Million Acquisition of Permian’s Gravity Water Midstream
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Delek Logistics Partners (DKL) has closed on the acquisition of Gravity Water Intermediate Holdings.
“The Gravity acquisition represents another significant step in DKL’s commitment of being a full suite crude, gas, and water midstream services provider in the Permian Basin. Gravity’s primary operations are in Howard County in the Midland Basin, and along with our recent H2O Midstream acquisition, provide a strong opportunity for integrated crude and water services to DKL’s customers,” said Avigal Soreq, president at Delek Logistics.
“We believe Delek Logistics continues to provide the best combination of yield and growth in the midstream sector. As previously indicated, DKL will be approaching greater than 70 percent of its EBITDA coming from third-party sources. We are excited about the prospects for DKL and the value it continues to bring to all of its stakeholders,” added Soreq.
The Gravity operations include integrated full-cycle water systems in the Permian Basin, in addition to produced water gathering, and transportation assets in the Bakken. Total consideration for the transaction is $285 million comprising of $200 million in cash (excluding customary closing adjustments) and ~2.175 million DKL units.
The acquisition is synergistic to DKL’s recent acquisition of H2O Midstream and supplements DKL’s integrated crude and produced water gathering and disposal offering in the Midland Basin. The acquisition also presents an opportunity to extract significant synergies through cost and commodity sale optimization.
Delek Logistics Partners, headquartered in Brentwood, Tennessee, was formed by Delek U.S. Holdings in 2012 to own, operate, acquire, and construct crude oil and refined products logistics and marketing assets. A substantial majority of its existing assets are integral to the success of Delek’s refining and marketing operations. They gather, transport, and store crude oil and market, distribute, transport, and store refined products in select regions of the southeastern United States and west Texas for Delek and third parties, primarily in support of Delek’s refineries in Tyler, Texas and El Dorado, Arkansas.
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