Delek Logistics Partners, LP (NYSE: DKL) has closed its acquisition of Gravity Water Intermediate Holdings LLC ("Gravity"), solidifying its position as a full suite crude, gas, and water midstream services provider in the Permian Basin. The total consideration for the transaction amounted to $285 million, consisting of $200 million in cash and approximately 2.175 million DKL units.
With the integration of Gravity's primary operations in Howard County in the Midland Basin and produced water gathering and transportation assets in the Bakken, Delek Logistics Partners, LP (DKL) is poised to enhance its integrated crude and produced water gathering and disposal offering in the Midland Basin.
Avigal Soreq, President at Delek Logistics, expressed confidence in the acquisition, citing the potential for significant synergies through cost and commodity sale optimization. The transaction is seen as complementary to DKL's recent acquisition of H2O Midstream and is expected to provide a strong opportunity for integrated crude and water services to DKL’s customers.
Notably, DKL anticipates that greater than 70% of its EBITDA will originate from third-party sources, underscoring the company's commitment to providing the best combination of yield and growth in the midstream sector.
The acquisition of Gravity aligns with DKL's strategy to be a leading midstream energy master limited partnership, with a focus on delivering gathering, pipeline, transportation, and other services for its customers in crude oil, intermediates, refined products, natural gas, storage, wholesale marketing, terminalling, water disposal, and recycling primarily in and around the Permian Basin, including both the Midland and the Delaware Basins, as well as other select areas in the Gulf Coast region.
The market has reacted to these announcements by moving the company's shares 1.0% to a price of $42.47. If you want to know more, read the company's complete 8-K report here.
