NEW YORK (TheStreet) -- Shares of Atlas Pipeline Partners L.P (APL) are higher by 3.21% to $34.70 in mid-morning trading on Monday, after it was announced that the company, and Atlas Energy L.P (ATLS) will both be acquired by Targa Resources Partners L.P. (NGLS) in transactions valuing the oil and gas limited partnerships at approximately $7.7 billion.

Atlas Pipeline's shareholders will receive consideration valued at $38.66 per share, the company said.

Shares of Atlas Energy are higher by 18.67% to $38.46 this morning.

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Atlas energy is going to spin off its non-midstream assets before the deal is closed, the Associated Press reports.

Both transactions are expected to close in early 2015. 

Separately, TheStreet Ratings team rates ATLAS PIPELINE PARTNER LP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate ATLAS PIPELINE PARTNER LP (APL) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and generally higher debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 2.8%. Since the same quarter one year prior, revenues rose by 35.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 582.7% when compared to the same quarter one year prior, rising from $8.28 million to $56.54 million.
  • ATLAS PIPELINE PARTNER LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ATLAS PIPELINE PARTNER LP swung to a loss, reporting -$2.19 versus $0.97 in the prior year. This year, the market expects an improvement in earnings (-$0.28 versus -$2.19).
  • APL's debt-to-equity ratio of 0.71 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that APL's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.65 is low and demonstrates weak liquidity.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ATLAS PIPELINE PARTNER LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: APL Ratings Report

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