Delek Logistics Partners, LP has announced the closing of the previously announced acquisition of Gravity Water Intermediate Holdings LLC. 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 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. 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% 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.”
Avigal Soreq, President, Delek Logistics
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 by Delek Logistics. Total consideration for the transaction is $285 million comprising $200 million in cash (excluding customary closing adjustments) and ~2.175 million DKL units. The acquisition also presents an opportunity to extract significant synergies through cost and commodity sale optimization.
Delek Logistics provides 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. Delek US Holdings, Inc. owns the general partner interest as well as a majority limited partner interest in Delek Logistics Partners, LP, and is also a significant customer. They have completed multiple acquisitions in the refining, marketing/logistics, and convenience store industries. The merging of assets from across the downstream energy supply chain has positioned us to benefit from a diversified revenue base. By leveraging the synergies, scalability, and operational efficiencies that overlap throughout our asset portfolio, we can create opportunities throughout the business cycle.