NEW YORK (TheStreet) -- Shares of CrossAmerica Partners (CAPL) were falling 8.1% to $30.32 on heavy trading volume Tuesday after the oil company priced the 4.6 million common units in its public offering.
CrossAmerica priced the 4.6 million common units in the public offering at $31.45 a common unit. The company granted the underwriters of the offering a 30-day option to buy up to 690,000 additional common units.
The company expects to receive net proceeds of about $138.6 million from the public offering, or about $159.4 million if the underwriters exercise their option in full. CrossAmerica plans to use the proceeds to reduce indebtedness outstanding under its credit facility, and then to reborrow under the credit facility to fund future acquisitions.
The offering is expected to close on June 19, 2015.
About 1.3 million shares of CrossAmerica were traded by 10:40 a.m. Tuesday, above the company's average trading volume of about 60,000 shares a day.
CrossAmerica Partners is engaged in the distribution of motor fuels, consisting of gasoline and diesel fuel, and to own and lease real estate used in the retail distribution of motor fuels.
TheStreet Ratings team rates CROSSAMERICA PARTNERS LP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CROSSAMERICA PARTNERS LP (CAPL) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and feeble growth in its earnings per share."