Ferrellgas Partners LPFGP announced the acquisition of Missouri-based propane retailer Gasco Energy Supply. The acquisition is expected to be immediately accretive to Ferrellgas' earnings. Gasco is a supplier of fuel for residential, commercial and agricultural uses in the Ozark region.
Acquisitions have driven Ferrellgas Partners' performance over the years. With the completion of a large number of acquisitions to date, the partnership has been able to grow from a single-location, independently owned propane retailer to a publicly traded organization.
The recent deal adds one more to the approximately 235 acquisitions the partnership has completed through its 75 years of existence. Ferrellgas has been deploying capital to diversify through both organic and inorganic means in the midstream and propane markets. This has expanded its top-line potential as well as optimized shareholder value.
On Jul 6, the partnership completed the acquisition of Propane Advantage, LLC, which helped it to enter the rapidly developing Salt Lake City market. The partnership's acquisition driven growth and presence across the U.S. put it in an advantageous position compared to other small-scale propane distributors.
As low propane prices are narrowing margins for retailers, Ferrellgas intends to shift to an EBITDA mix of 50% propane and 50% midstream by the end of fiscal 2018 from the current mix of 70% propane and 30% midstream.
In Jun 2015, Ferrellgas Partners expanded its midstream business through the acquisition of Bridger Logistics, LLC, a provider of integrated crude oil midstream services.
Ferrellgas Partners carries a Zacks Rank #3 (Hold). Some better-ranked peers include Alon USA Partners, LP ALDW and Northern Tier Energy LP NTI , sporting a Zacks Rank #1 (Strong Buy) and Sprague Resources LP SRLP , carrying a Zacks Rank #2 (Buy).