By midafternoon, shares had spiked 5.5% to $40.88. Trading volume of 4.5 million was far higher than its three-month daily average of 50,548.
The oil and gas refiner and marketer will offer 5.3 million shares of its common stock and an additional 3.7 million common stock will be offered by Summit Midstream Partners Holdings (SMP Holdings). The company priced its public offering at $38.75 per share and scheduled it to close on March 17, subject to regulatory approval.
Summit Midstream said the net proceeds from the offering will be used to finance part of its recently-announced acquisition of Red Rock Gathering Company, a natural gas processor in Colorado and Utah. Summit will receive none of the funds from SMP Holdings' sale.
Underwriters will also have access to a 30-day option to purchase an additional 1.35 million common shares from SMP Holdings.
Barclays, Bank of America, Morgan Stanley, Deutsche Bank, RBC Capital, Citigroup, Goldman Sachs and Wells Fargo are acting as joint book-running managers, while Baird and BB&T Capital Markets will act as co-managers.
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TheStreet Ratings team rates SUMMIT MIDSTREAM PARTNERS LP as a Hold with a ratings score of C-. The team has this to say about their recommendation:
"We rate SUMMIT MIDSTREAM PARTNERS LP (SMLP) 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 solid stock price performance, robust revenue growth and good cash flow from operations. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good."
- You can view the full analysis from the report here: SMLP Ratings Report