Delek Logistics acquires Gravity Water Midstream for $285M

Delek Logistics (DKL) announced the development of permitted acid gas injection, or AGI, capabilities at its under-construction Libby 2 gas processing plant. The company said this expansion not only lays the groundwork for further Libby complex expansion but also adds significant standalone economic value to the original project lowering the overall build multiple. The company expects to have the AGI capabilities in the second half of 2025. Additionally, DKL announced the acquisition of Gravity Water Midstream for a total consideration of $285M. 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 company is being acquired at an EBITDA multiple below 5.5x excluding synergies and is immediately accretive to DKL’s free cash flow, EBITDA and leverage. DKL also secured an additional 34,000 acreage dedication incremental to the previously announced 50,000 acreage dedication in the Midland Basin. The additional acreage dedication improves the overall economics and opens the possibility of a cross commodity offering in the future. This takes total acreage dedication to DKL in the Midland Basin to 400,000 acres.