Western Midstream to Buy Brazos Delaware II in $1.6 Billion Mixed Deal
The acquisition expands the partnership's gathering and processing footprint in the Delaware Basin while maintaining a target net leverage of 3.0x.
Western Midstream Partners, LP (WES) agreed to acquire Brazos Delaware II, LLC in a mixed-consideration transaction valued at approximately $1.6 billion.
Under the terms of the agreement, Western Midstream will pay approximately $800 million in cash and issue approximately $800 million in common units. The purchase price represents an approximately 8.0x multiple on 2027 estimated EBITDA, which the company expects to decline to approximately 7.5x following the commercialization of available processing capacity and the realization of identified synergies. The transaction has closed.
Western Midstream said the acquisition expands its gathering and processing footprint in the Delaware Basin and aligns with its philosophy of deploying capital that sustains or grows its distribution. The deal is expected to contribute approximately $100 million of incremental Adjusted EBITDA in 2026 and be immediately accretive to estimated 2026 Distributable Cash Flow per unit.
"The Brazos acquisition is in line with WES’s M&A philosophy of making accretive, strategic acquisitions that enhance the value of WES’s existing asset base, provide a diverse set of high-quality customers, and generate strong Free Cash Flow, all while protecting our investment grade credit ratings," said Oscar K. Brown, President and Chief Executive Officer of Western Midstream.
Brazos is one of the largest privately held gathering and processing platforms in the Texas Delaware Basin. Its assets include approximately 900 miles of pipeline and 460 MMcf/d of nameplate natural-gas processing capacity at the Comanche processing complex. The target also holds approximately 470,000 dedicated acres under long-term, fixed-fee contracts with a weighted average remaining contract life of more than nine years.
The acquisition follows Western Midstream's previous purchase of Aris in a transaction with an enterprise value of approximately $2.0 billion. The Aris deal reinforced the company's position as a leading midstream water services provider in the Delaware Basin and targeted $40 million in annualized cost synergies.
Western Midstream expects to maintain pro forma net leverage of approximately 3.0x throughout 2026. The company noted that the addition of the Comanche processing complex strengthens its position as one of the largest natural-gas processors in the basin and provides capacity to support growth from the Woodford and other high-return formations.