Blog Coverage Ferrellgas Partners Acquires Valley Center Propane to Grow its Business in Southern California
Upcoming AWS Coverage on HollyFrontier Post-Earnings Results
LONDON, UK / ACCESSWIRE / March 16, 2017 / Active Wall St. blog coverage looks at the headline from Ferrellgas Partners, L.P. (NYSE: FGP) as the Company made an announcement on March 15, 2017, that it has acquired privately owned independent propane retailer - Valley Center Propane. This strategic deal continues Ferrellgas' tradition of expanding its core propane business via acquisitions. Register with us now for your free membership and blog access at:
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One of Ferrellgas Partners' competitors within the Oil & Gas Refining & Marketing space, HollyFrontier Corp. (NYSE: HFC), reported on February 22, 2017, its financial results for Q4 ended December 31, 2016. AWS will be initiating a research report on HollyFrontier in the coming days.
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Commenting on the acquisition James Ferrell, Interim CEO and President of Ferrellgas said:
"California has long been successful market for Ferrellgas. Our purchase of Valley Center Propane further solidifies our presence in the state and helps us improve upon the service we offer to homes and businesses in north San Diego County."
The transaction is expected to be immediately accretive; however, the exact financial and other terms of the deal have not been shared by both Companies.
About the two parties to the agreement
Ferrellgas Partners, L.P. operates via its operating partnership, Ferrellgas, L.P., and subsidiaries, and it has been supplying propane across America for nearly 80 years. It also provides propane to customers in 50 states, the District of Columbia, and Puerto Rico. Since 2014, the Company diversified it business and started to acquire crude oil midstream assets and provides midstream services to major energy Companies in US. Employees of Ferrellgas indirectly own nearly 22.8 million common units in the partnership via ESOPs (employee stock ownership plan).
The Company has a proven strategy of expanding its core business through strategic partnerships with diverse and growth-oriented Companies. From its inception till date, Ferrellgas has completed more than 235 acquisitions. These strategic acquisitions have allowed the Company to grow from a privately owned single-location propane retailer to its current avatar of a listed Company that is one of the largest propane retailers in the US with approximately 1 million customers.
Valley Center, California based Valley Center Propane is a family owned and managed business which offers delivery and tank service to Valley Center and San Diego county. It provides propane as well as leases out propane tanks to residential, commercial and wholesale customers.
Ferrellgas Financial performance
Recently, on March 09, 2017, Ferrellgas had disclosed its financial results for its fiscal Q2 2017, ending on January 31, 2017. Its net earnings for the reported period were $38.1 million, and the adjusted EBITDA was $105.0 million. The sale of Propane was 267.7 million gallons which was 7% higher than the sale of 250.2 million gallons recorded in fiscal Q2 2016. In February 2017, the Company had declared its fiscal Q2 2017 cash distribution of $0.10 per partnership common unit which is payable on March 17, 2017. The Company also managed to raise funds by issuing $175 million Senior Notes via private placement. The funds raised from these senior notes were to be utilized to pay off its debts.
In September 2016, Stephen Wambold President and CEO of Ferrellgas quit the Company and James E. Ferrell, the Founder and Chairman of the Board took over the reins as Interim President and CEO. Ferrellgas also made changes in the top management at its two businesses Bridger Logistics LLC, Ferrellgas' integrated crude oil midstream services, and Blue Rhino, its propane tank exchange brand. Dan Giannini was appointed as President of Bridger Logistics and Geoff Berger took over as Executive Vice President at Blue Rhino. James Ferrell is confident that these leadership changes will help the growth and improve the performance of the Company in FY17.
Stock Performance
At the close of trading session on Wednesday, March 15, 2017, Ferrellgas Partners' stock price marginally rose 0.84% to end the day at $6.02. A total volume of 511.67 thousand shares were exchanged during the session. The stock currently has a market cap of $599.95 million and has a dividend yield of 6.64%.
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