What Happened?
Shares of water handling and recycling company Aris Water (NYSE: ARIS) jumped 20.7% in the afternoon session after it announced its acquisition by Western Midstream Partners for approximately $1.5 billion in cash and stock. The agreement gave Aris shareholders the option to receive either $25 in cash or 0.625 units of Western Midstream for each share held. This strategic purchase aimed to create a more integrated water management system for Western Midstream in the Delaware Basin, expanding its footprint into the New Mexico part of the Permian Basin. The companies expected the transaction to close by the end of 2025.
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What Is The Market Telling Us
Aris Water’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. But moves this big are rare even for Aris Water and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 23.6% on the news that the company reported impressive fourth-quarter results that blew past analysts' revenue and EBITDA estimates. Looking ahead, EBITDA guidance for the next quarter came in below Wall Street estimates, partly due to anticipated customer shut-ins from weather disruptions. Meanwhile, the company raised its quarterly dividend by 33%, signaling confidence in its cash flow despite near-term headwinds. Overall, this was a decent quarter.
Aris Water is down 1.8% since the beginning of the year, and at $24.00 per share, it is trading 28.4% below its 52-week high of $33.53 from April 2025. Investors who bought $1,000 worth of Aris Water’s shares at the IPO in October 2021 would now be looking at an investment worth $1,678.
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