Sunoco LP SUN, a unit of natural gas transportation and storage partnership Energy Transfer Partners LP ETP, declared that it has closed the acquisition of a wholesale motor fuel distribution business.
Sunoco spend roughly $57 million along with the value of closing inventory on hand for the purchase. The business serves Northeast U.S. by distributing 55 million gallons of gasoline every year. It is to be noted that the transaction also includes the purchase of 32 fee and leased assets.
Investors should know that Sunoco has financed the purchase by the amount obtainable under its revolving credit facility.
Management revealed that the transaction complements the current wholesale fuel distribution operations of Sunoco in Northeast U.S. Most importantly, the partnership anticipates the transaction to drive its distributable cash flows immediately.
Sunoco is a master limited partnership that mainly supplies motor fuel to independent dealers, stores, distributors and commercial customers. Apart from its distribution business, the partnership is also involved in the operation of retail fuel units and 150 convenience stores.
Sunoco’s parent company Energy Transfer Partners is engaged primarily in the gathering, processing, storage and transportation of natural gas. Additionally, the partnership holds a 70% stake in Lone Star NGL LLC, a joint venture that owns and operates natural gas liquids storage, fractionation and transportation assets in Texas, Louisiana and Mississippi.
Currently, both Sunoco and Energy Transfer Partners carry a Zacks Rank #2 (Buy), implying that the stocks will outperform the broader U.S. equity market over the next one to three months.
Meanwhile, some better-ranked players in the energy sector are Murphy USA Inc. MUSA and Energy Transfer Equity LP ETE. Both stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment