Please ensure Javascript is enabled for purposes of website accessibility

Why TransMontaigne Partners Surged 12.7% Today

By Tyler Crowe – Nov 26, 2018 at 11:50AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Another oil and gas midstream company gets gobbled up.

What happened

Shares of master limited partnership TransMontaigne Partners (TLP) were up 12.7% as of 11:45 a.m. EST today after the company announced that a private equity firm would acquire it.

So what

As it happens every time there is a buyout, shares are up to the proposed acquisition price -- $41 per share in this case. The storage and logistics specialist announced that ArcLight Energy Partners Fund, a subsidiary of private equity firm ArcLight Capital Partners, will acquire the outstanding stake it doesn’t already own. 

It was likely just a matter of time until this merger happened, as ArcLight and its various affiliate funds owned the general-partner stake in TransMontaigne and had made an offer in July to acquire it. This new offer is a 7.9% premium to its prior offer. 

Oil storage tanks

Image source: Getty Images.

Now what

TransMontaigne had a lot of qualities an investor would want in an oil and gas storage and logistics company. Management was conservative with its payout, kept a modest debt profile, and kept payouts more or less growing since its IPO close to a decade ago. That was likely a large reason ArcLight was interested in the business in the first place. With the buyout price baked into the stock, though, there is no reason for investors to buy now. 

Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Transmontaigne Partners L.P. Stock Quote
Transmontaigne Partners L.P.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.