Form 4: Aris Water CFO Converts Shares in Western Midstream Merger

Aris Water Solutions CFO Stephan E. Tompsett converted all his Class A common stock and restricted stock units into cash or Western Midstream Partners units following the August 2025 merger.

Summary

• Reporting Person Stephan E. Tompsett, Chief Financial Officer of Aris Water Solutions, Inc. [ARIS], reported changes in beneficial ownership due to a merger.
• The merger agreement was entered into on August 6, 2025, by Aris Water Solutions, Inc. and Western Midstream Partners, LP ("Parent") and related entities.
• As of the merger's effective time on October 15, 2025, all of Tompsett's Class A common stock and restricted stock units were converted into merger consideration.
• He disposed of 137,050 shares of Class A Common Stock.
• He also disposed of 62,022, 86,780, and 28,620 performance-based restricted stock units.
• Following these transactions, his direct beneficial ownership of these specific securities is 0.

Sentiment

Score: 7

Explanation: The filing reports the successful completion of a merger, which provides a clear exit for shareholders and a defined payout for executive equity. While it marks the end of Aris Water as an independent entity, the terms appear structured to provide fair consideration for equity holders, including favorable treatment for performance-based awards.

Positives

• The merger provides liquidity and a clear exit strategy for Aris Water Solutions shareholders, including management.
• Shareholders had multiple election options for consideration, including cash, parent common units, or a combination.
• Performance-based restricted stock units were converted to cash, assuming performance conditions were met at the greater of target or actual levels, providing a favorable payout for executives.

Negatives

• The filing indicates the cessation of Aris Water Solutions as an independent publicly traded entity, as its shares are converted into merger consideration.
• The specific cash consideration of $25.00 per share for RSUs and PSUs, and the cash component of $7.00 for Class A shares, might be lower than some investors' expectations depending on the stock's trading history.

Future Outlook

The filing primarily reports a past event (the merger's effective time and conversion of securities) rather than providing forward-looking guidance for the now-merged entity. The future outlook for former Aris Water shareholders depends on their chosen consideration (cash or Western Midstream Partners units).

Industry Context

This merger signifies consolidation within the water solutions sector, particularly for oil and gas operations. Western Midstream Partners, LP acquiring Aris Water Solutions, Inc. suggests a strategic move to integrate water management services, potentially aiming for operational efficiencies and expanded service offerings within the midstream energy infrastructure.

Comparison to Industry Standards

• The merger consideration structure, offering cash, equity, or a combination, is a common practice in M&A transactions, providing flexibility to target shareholders.
• The conversion of restricted stock units (RSUs) and performance stock units (PSUs) into cash at a fixed price, often with performance conditions deemed met at target or higher, is a standard approach to executive compensation in change-of-control events, ensuring executives are compensated for their equity awards.
• The $25.00 per share valuation for RSUs/PSUs and as a cash option for Class A shares provides a benchmark for the acquisition price, which can be compared to other recent acquisitions in the water infrastructure or midstream sectors. Without specific financial metrics for Aris Water, a direct comparison to specific companies like Xylem Inc. or Evoqua Water Technologies Corp. (in broader water treatment) or other midstream players like Energy Transfer LP or Kinder Morgan, Inc. (for asset valuations) is difficult, but the per-share price reflects the agreed-upon value in the merger.

Stakeholder Impact

• Shareholders: Aris Water Solutions shareholders receive cash or Western Midstream Partners units, concluding their investment in Aris Water.
• Employees: The merger likely impacts Aris Water employees, with potential integration into Western Midstream Partners or workforce adjustments, though not detailed in this filing.
• Management: Stephan E. Tompsett, as CFO, has converted his equity, indicating a change in his direct financial interest in the former Aris Water. His future employment status is not specified.

Next Steps

• Former Aris Water Solutions shareholders will receive their elected merger consideration (cash or Western Midstream Partners units).
• Stephan E. Tompsett's future role with Western Midstream Partners, LP, if any, would be subject to separate announcements.

Key Dates

Recommendation

The filing reports the completion of a merger where Aris Water Solutions, Inc. is acquired. For existing shareholders, the decision to "hold" or "sell" would have been made prior to or during the election period for the merger consideration. Since the transaction is complete, there is no longer an independent Aris Water stock to buy or sell. For those who received Western Midstream Partners units, the recommendation would shift to an analysis of Western Midstream Partners. For the purpose of Aris Water, the stock is no longer trading, so a "hold" reflects the finality of the transaction for former shareholders.

Keywords

Aris Water Solutions, Western Midstream Partners, Merger, Form 4, Insider Trading, Stephan E. Tompsett, CFO, Restricted Stock Units, Performance Stock Units, Equity Conversion, ARIS