NGL Energy Partners LP (NGL) Shares Jump 33% on $350 Sale of TransMontaigne GP LLc


Shareholders of NGL Energy Partners LP (NYSE:NGL) are quite happy this morning, after the company announced that it has agreed to a deal with ArcLight Capital Partners to sell Transmontaigne GP LLC for $350 million in cash. This has sent the stock soaring over 33% this morning.

The deal is expected to close by the end of this month, and the funds will be used to pay back loans on its revolving credit facility. The move will give NGL Energy Partners LP (NYSE:NGL) approximately $20 million in annual savings via cost reductions and revenue enhancements.

“Within a 75-day period, NGL will have reduced capital requirements by approximately $200 million through the previously announced Grand Mesa / Saddlehorn transaction, and raised $350 million in cash in this transaction, while generating additional EBITDA and DCF,” said CEO of NGL, Mike Krimbill. “These recent actions provide many benefits to NGL and position it to successfully execute its growth plans in what continues to be a challenging market environment for MLPs.”

The stock is up 33.55% or $3.06 following the news, hitting $12.18 per share. About 1.82M shares traded hands or up 13.04% from the average. NGL has declined 69.40% since June 4, 2015 and is currently downtrending. It has underperformed the S&P500 by 63.54%.

From a total of 7 analysts covering NGL ENERGY PARTNERS LP (NYSE:NGL) stock, 3 rate it a “Buy”, 1 a “Sell”, and 3 a “Hold”. This means that 43% of the ratings are positive. The highest target price is $32 while the lowest target price is $16. The mean of all analyst targets is $22.20 which is 82.27% above today’s ($12.18) stock price. NGL ENERGY PARTNERS LP was the topic of 12 analyst reports since August 11, 2015 according to the firm StockzIntelligence Inc. Raymond James downgraded shares on January 4 to a “Mkt Perform” rating. Bank of America downgraded NGL stock in a recent report from December 10 to a “Underperform” rating. Finally, Wunderlich maintained the stock with a “Buy” rating in a report they issued on a November 11.

The institutional sentiment decreased to 0.81 in Q2 2015. It’s down 0.52, from 1.33 in 2015Q2. The ratio worsened, as 18 funds sold all their NGL Energy Partners LP shares they owned while 44 reduced their positions. 15 funds bought stakes while 35 increased their total positions. Institutions now own 57.84 million shares which is 1.33% less than the previous share count of 58.63 million in 2015Q2.

Salient Capital Advisors Llc holds 2.68% of its total portfolio in NGL Energy Partners LP, equating to 5.52 million shares. Cushing Asset Management Lp owns 2.86 million shares representing 2.17% of their total US portfolio. Moreover, Ngp Mr Management Llc has 2.11% of their total portfolio invested in the company, equating to 176,634 shares. The Texas-based Eagle Global Advisors Llc has a total of 1.92% of their portfolio invested in the stock. Energy Income Partners Llc, a Connecticut-based fund reported 3.57 million shares owned.

NGL Energy Partners LP is a limited partnership firm that is a vertically-integrated service provider. The company has a market cap of $976.06 million.