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Tesoro Agrees to Acquire Renewable Fuels Company Virent
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San Antonio, TX-based Tesoro Corporation announced that it has decided to purchase the Madison, WI-based renewable fuels and chemical company, Virent. The deal is intended to support the latter in bringing biofuels technology to commercial scale.
Under this deal, Tesoro will provide resources and expertise to Virent in order to help the company scale up and commercialize its BioForming technology for the production of low carbon bio-based fuels and chemicals.
Moreover, Tesoro expects the addition of Virent will help it to lower costs in compliance with the federal renewable fuel standard and California`s low carbon fuel standard.
Post acquisition, Virent will become a wholly owned subsidiary of Tesoro but continue to operate from Madison. The strategic relationship between the two companies was initiated in Jan 2016 and is expected to close by the end of September. Terms of the agreement, however, have not been disclosed as yet.
Tesoro is an independent refiner and marketer of refined petroleum products in the western U.S. The company operates via three segments – Refining (accounted for 58.4% of the company’s total 2015 operating income), TLLP (13.2%) and Marketing (28.4%).
Tesoro has been in troubled waters of late due to TLLP's (the company's logistics partnership) lack of organic growth prospects and weaker retail fuel margin. Moreover, with cost of gasoline, heating oil, and other refined products catching up on the beaten down crude price, crack spreads have come under pressure. This is expected to have an adverse affect on Tesoro’s earnings and cash flows.
Hence, the company currently carries a Zacks Rank #4 (Sell), which implies that the stock will underperform the broader U.S. equity market over the next one to three months.
Some better-ranked players from the broader energy sector include NGL Energy Partners LP (NGL - Free Report) , Enviva Partners, LP (EVA - Free Report) and Matador Resources Company (MTDR - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy).
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Tesoro Agrees to Acquire Renewable Fuels Company Virent
San Antonio, TX-based Tesoro Corporation announced that it has decided to purchase the Madison, WI-based renewable fuels and chemical company, Virent. The deal is intended to support the latter in bringing biofuels technology to commercial scale.
Under this deal, Tesoro will provide resources and expertise to Virent in order to help the company scale up and commercialize its BioForming technology for the production of low carbon bio-based fuels and chemicals.
Moreover, Tesoro expects the addition of Virent will help it to lower costs in compliance with the federal renewable fuel standard and California`s low carbon fuel standard.
Post acquisition, Virent will become a wholly owned subsidiary of Tesoro but continue to operate from Madison. The strategic relationship between the two companies was initiated in Jan 2016 and is expected to close by the end of September. Terms of the agreement, however, have not been disclosed as yet.
TESORO CORP Price
TESORO CORP Price | TESORO CORP Quote
Tesoro is an independent refiner and marketer of refined petroleum products in the western U.S. The company operates via three segments – Refining (accounted for 58.4% of the company’s total 2015 operating income), TLLP (13.2%) and Marketing (28.4%).
Tesoro has been in troubled waters of late due to TLLP's (the company's logistics partnership) lack of organic growth prospects and weaker retail fuel margin. Moreover, with cost of gasoline, heating oil, and other refined products catching up on the beaten down crude price, crack spreads have come under pressure. This is expected to have an adverse affect on Tesoro’s earnings and cash flows.
Hence, the company currently carries a Zacks Rank #4 (Sell), which implies that the stock will underperform the broader U.S. equity market over the next one to three months.
Some better-ranked players from the broader energy sector include NGL Energy Partners LP (NGL - Free Report) , Enviva Partners, LP (EVA - Free Report) and Matador Resources Company (MTDR - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>