By David French, Ankita Bora and Arasu Kannagi Basil (Reuters) – WaterBridge Infrastructure’s shares jumped 14.2% in their debut on the New York Stock Exchange on Wednesday, giving the midstream water management firm a market valuation of around $2.6 billion. Shares of the Houston, Texas-based company, which is backed by private equity firm Five Point, […]
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Five Point-backed WaterBridge jumps 14% in NYSE debut
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By David French, Ankita Bora and Arasu Kannagi Basil
(Reuters) – WaterBridge Infrastructure’s shares jumped 14.2% in their debut on the New York Stock Exchange on Wednesday, giving the midstream water management firm a market valuation of around $2.6 billion.
Shares of the Houston, Texas-based company, which is backed by private equity firm Five Point, opened at $25 each, well above the offer price of $20 apiece, before finishing their first day at $22.83.
WaterBridge operates water networks across key U.S. shale basins, offering supply, recycling and disposal services to oil and gas producers. Shale energy production uses significant amounts of water, making its handling an essential part of the fracking process.
With a limited number of locations in the U.S. to dispose of wastewater, WaterBridge’s asset base provides a rare investment opportunity, company executives told Reuters. They added the IPO process allowed it to explain both the company and its business to investors, which helped convert initial interest into a significant order book for its shares.
“The barriers to entry for water management are far in excess for what they are in, say, natural gas gathering and processing,” said David Capobianco, chairman of WaterBridge and founder of Five Point, which formed WaterBridge in 2016. Singapore sovereign wealth fund GIC bought a minority stake in 2019.
Capobianco added this competition moat meant WaterBridge would ultimately trade at a higher earnings multiple than a traditional pipeline operator, with its valuation more akin to the multiple for a waste management company.
ENERGY IPOs
U.S. IPOs have made a long-awaited comeback this autumn as investors looked past tariff uncertainty. Record-high equity markets and rate cut expectations have also provided a shot in the arm for new listings.
While there was a spurt of energy IPOs at the start of the year, including Venture Global, Flowco and Infinity Natural Resources, most have struggled to trade above their offer price and the cadence of stock market listings from the industry has since slowed.
Investor interest was buoyant for WaterBridge, though; it sold 31.7 million shares to raise $634 million in an upsized initial public offering. It had earlier marketed 27 million shares for $17 to $20 apiece.
“WaterBridge’s IPO likely will be an important indicator to gauge the oil and gas energy market in general,” said Jeff Whittle, head of law firm Womble Bond Dickinson’s global energy and natural resources industry sector.
It is the second company that Capobianco’s Five Point has taken public in little more than a year. Land management company LandBridge debuted in June 2024 and has tripled in value since.
WaterBridge partners with LandBridge, which owns and leases land in the Permian Basin of Texas and New Mexico for energy and industrial development, including sites to dispose of wastewater from oil and gas production.
Jason Long, CEO of both WaterBridge and LandBridge, said the two companies leveraged each other’s technical expertise, knowledge and other capabilities.
“We think about WaterBridge as being the tip of the spear for LandBridge,” Long said.
(Reporting by Ankita Bora and Arasu Kannagi Basil in Bengaluru and David French in New York; Editing by Shilpi Majumdar, Shreya Biswas and Matthew Lewis)