NEW YORK (TheStreet) -- Susser Holdings (SUSS) shares are jumping, up 39.5% to $79.60 in early market trading on Monday, following the announcement of its acquisition agreement with Energy Transfer Partners (ETP).

Under the agreement, Energy Transfer Partners will acquire the gas station and convenience store operator for approximately $1.8 billion.

Energy Transfer Partner shares are down -0.2% to $55.70 in early market trading.

Under the agreement, Susser Holdings shareholders will have the option of receiving either $80.25 in cash, 1.4506 ETP common share units or a combination of both per share share owned as compensation.

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The transaction was unanimously approved by the boards of both companies and is expected to close in the third quarter of this year.

TheStreet Ratings team rates SUSSER HOLDINGS CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate SUSSER HOLDINGS CORP (SUSS) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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

  • The revenue growth came in higher than the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 10.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 144.71% to $25.81 million when compared to the same quarter last year. In addition, SUSSER HOLDINGS CORP has also vastly surpassed the industry average cash flow growth rate of -7.20%.
  • SUSSER HOLDINGS CORP's earnings per share declined by 44.9% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SUSSER HOLDINGS CORP reported lower earnings of $0.65 versus $2.18 in the prior year. This year, the market expects an improvement in earnings ($2.34 versus $0.65).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • SUSS's debt-to-equity ratio of 0.90 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 SUSS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.63 is low and demonstrates weak liquidity.
  • You can view the full analysis from the report here: SUSS Ratings Report
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