NEW YORK (TheStreet) -- Shares of Buckeye Partners (BPL - Get Report) were falling on heavy trading volume late Tuesday afternoon after announcing Monday evening that it will acquire a 50% stake in marine terminal company VTTI (VTTI) for $1.15 billion.
The other 50% of VTTI will be held by oil trader Vitol and its investment vehicle, Buckeye Partners said in a statement.
The transaction is expected to close in early 2017 and be immediately accretive to its distributable cash flow per limited partner unit in 2017.
"We expect this investment to generate increasing quarterly distributions supported by stable fee-based cash flows," Buckeye Partners CEO Clark Smith said in a statement.
The company commenced a public offering of 7.5 million shares to help fund the investment.
Additionally, Buckeye Partners reported 2016 third-quarter earnings of $1.19 per diluted share on $766.6 million revenue. Analysts surveyed by FactSet were looking for earnings of 98 cents per share on $792.9 million in revenue.
About 4 million shares of Buckeye Partners have been traded so far today, well above the company's average trading volume of roughly 389,348 shares a day.
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.
Buckeye Partners' strengths such as its impressive record of earnings per share growth, compelling growth in net income, notable return on equity, expanding profit margins and good cash flow from operations outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
You can view the full analysis from the report here: BPL
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 article's author.