Produced-water manager Aris jumps almost 20% on news of its being acquired at premium

Shares of Aris Water Solutions, a provider of solutions for water handling and recycling in oil and gas production, soared more than 19% yesterday, August 7. The company announced it would be acquired at a premium by energy producer Western Midstream Partners. 

Aris rose more than 19% yesterday on the New York Stock Exchange to $23.78 per share. Investors were reacting to the news that the company would be acquired by Western Midstream Partners, which offers a variety of services to the oil and gas industry, including gathering and disposing of produced water.

The deal is valued at approximately $2 billion before transaction costs. Western Midstream plans to pay 28% in cash and 72% in new shares.

Aris investors will choose: receive 0.625 Western Midstream common shares for each unit of Aris stock or take $25 in cash per share (without interest), or a combination of both. That's a quarter more than Aris was trading at on Wednesday, the day before the deal was announced.

The deal is expected to close in the fourth quarter. The boards of both companies have voted in favor of the merger, but it still must be approved by Aris shareholders and regulators.

Aris complements Western Midstream's existing produced-water business and will diversify its portfolio with the acquired company's long-term contracts, stated Western Midstream. The deal extends the company's footprint far to the north into Lea and Eddy counties, New Mexico, providing access to incremental throughput opportunities across its natural-gas, crude-oil, and produced-water businesses, the statement said. This is expected to contribute to significant EBITDA growth in 2026. 

Still, Western Midstream stock dropped 4.7% yesterday to $38.34 per share. This took place even though on the same day the company reported record adjusted EBITDA for the second quarter, at $617.9 million.

Aris has soared nearly 67% over the last 12 months but is about flat year to date. 

Wall Street analysts are split on the outlook, with five rating the stock a "buy" and the same number a "hold," according to MarketWatch. The average target price of $27.20 per share implies 14% upside.

The AI translation of this story was reviewed by a human editor.