NEW YORK (TheStreet) -- Shares of Tesoro Corp. (TSO) closed higher on Tuesday as the San Antonio-based independent petroleum refining and marketing company said it will purchase the private renewable fuels and chemical company Virent.
Terms of the deal were not disclosed. Tesoro said it hopes to use the Madison, WI-based company's renewable energy technology, called BioForming, which can convert sugars and other biomass derived feedstocks into renewable gasoline blendstocks and aromatics.
These blendstocks and aromatics are "fully compatible" with existing fuel infrastructures and vehicle warranties in the U.S., Tesoro said in a statement.
"With this acquisition, Tesoro intends to foster more rapid commercialization of Virent's renewables technology, which could uniquely position the company with an improved means of future regulatory compliance, as well as potential licensing opportunities," said CJ Warner, Tesoro's executive VP of operations, in a statement.
Tesoro will operate Virent as a subsidiary and the company will keep its headquarters in Madison. The deal is slated to close at the end of September.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
The team rates Tesoro as a Buy with a ratings score of B. This is driven by a few notable strengths, which it believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks the team covers. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. The team feels its strengths outweigh the fact that the company shows weak operating cash flow.You can view the full analysis from the report here: TSO