Delek Logistics Partners, LP has finalised its acquisition of Gravity Water Intermediate Holdings LLC, further expanding its footprint in the Permian Basin and enhancing its midstream services portfolio.
Strategic Significance
The acquisition aligns with Delek Logistics’ strategy of providing comprehensive crude, gas, and water midstream services. Gravity’s primary operations are based in Howard County in the Midland Basin, and the transaction complements DKL’s recent purchase of H2O Midstream. Together, these acquisitions position DKL to offer integrated crude and water services, enhancing value for its customers.
Delek Logistics President Avigal Soreq highlighted the importance of the acquisition, stating:
“The Gravity acquisition represents another significant step in DKL’s commitment to being a full-suite crude, gas, and water midstream services provider in the Permian Basin. Along with our recent H2O Midstream acquisition, this transaction provides a strong opportunity for integrated crude and water services to DKL’s customers. We are excited about the prospects for DKL and the value it continues to bring to all of its stakeholders.”
Soreq also noted that with this transaction, over 70 percent of DKL’s EBITDA is now expected to come from third-party sources, underscoring the company’s focus on diversifying revenue streams and driving stakeholder value.
Transaction Details
- Total consideration: $285 million
- $200 million in cash (excluding customary closing adjustments)
- Approximately 2.175 million DKL units
- Assets acquired:
- Integrated full-cycle water systems in the Permian Basin
- Produced water gathering and transportation assets in the Bakken
Synergistic Opportunities
Gravity’s assets will bolster DKL’s integrated crude and produced water gathering and disposal offerings in the Midland Basin. Additionally, the acquisition presents significant synergies through cost efficiencies and commodity sale optimisation, further strengthening DKL’s position in the midstream sector.
Future Outlook
With the addition of Gravity’s operations, Delek Logistics is well-positioned to enhance its capabilities and deliver a strong combination of yield and growth. This strategic acquisition underscores DKL’s commitment to providing comprehensive and efficient midstream services, solidifying its leadership in the Permian Basin and beyond.
For more information visit www.deleklogistics.com
