Petroleum products distributor
Global Partners L.P.
) has agreed to acquire 100% stake in a crude oil and ethanol
facility near Portland, Oregon from a subsidiary of construction
company JH Kelly Holdings LLC. The transaction, valued at $95
million, is expected to close by Mar 31, 2013.
As per the deal, Global Partners would get a rail
loading/unloading facility, up to 200,000 barrels of storage
capacity, a marine terminal with deepwater berths, a 1,200-foot
long dock, apart from West Coast's biggest ethanol plant located
along the Columbia River in Clatskanie, Oregon.
The transaction will allow Global Partners to expand its
distribution network by transporting low cost crude and ethanol
to operators on the West Coast.
Waltham, Massachusetts-based Global Partners L.P. is a publicly
traded master limited partnership that distributes refined
petroleum products to customers in the northeastern U.S. It
possesses one of the largest networks of refined petroleum
terminals in the region. Additionally, Global Partners supplies
fuel to approximately 800 retail gas stations in nine
Global Partners - which entered into a five-year oil
transportation and logistics agreement with refiner
) earlier this month - currently retains a Zacks Rank #1 (Strong
Buy), implying that it is expected to significantly outperform
the broader U.S. equity market over the next one to three months.
Not often does one find a stock with big earnings growth and a
high yield. But in the case of Global Partners, an estimated
long-term earnings growth projection of 47% coalesces with a 7%
Presently trading near its 52-week high, units of this #1
Ranked partnership have climbed more than 25% during the past
month. With accretive acquisitions, incremental growth projects
and a PEG ratio of less than 1.0, Global Partners looks like a
solid aggressive play with a potential for further upside.
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In addition to Global Partners, there are certain other
downstream energy operators like
Northern Tier Energy L.P.
CVR Energy Inc.
) that offer value and are worth buying now. Both these firms
sport a Zacks Rank #1 (Strong Buy).