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Targa (TRGP) Completes $200 Million Southcross Energy Takeover

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The Houston, TX-based midstream energy infrastructure company Targa Resources Corp.  (TRGP - Free Report) recently announced that it concluded the previously declared acquisition of Southcross Energy Operating LLC and its subsidiaries in South Texas.

The deal, which was initially estimated to be worth $200 million, will strengthen Targa’s natural gas gathering and processing footprint. Moreover, this transaction signifies a 4X adjusted EBITDA multiple and delivers the added synergy potential to reduce the acquisition multiple over time.

The acquisition offered TRGP the potential to move a presently idle 200 million cubic feet per day plant through fee-based contracts and continued simplification through Southcross’ remaining T2 joint-venture interests.

Targa Resources is a premier energy infrastructure company. A leading provider of integrated midstream services in North America, this operator primarily derives its revenues from gathering, compressing, treating, processing and selling natural gas. TRGP also provides services associated with natural gas liquids, including those to liquefied petroleum gas exporters and crude oil.

Targa currently has a Zacks Rank #2 (Buy). Those interested in the energy sector might want to look at other top-ranked stocks. SM Energy (SM - Free Report) , Centennial Resource Development and Imperial Oil (IMO - Free Report) each sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for SM Energy’s 2022 earnings is projected at $9.20 per share, up about 397.3% from the projected year-ago earnings of $1.85.

SM Energy beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 153.9%. SM stock has rallied 110.1% in a year.

The Zacks Consensus Estimate for Centennial’s 2022 earnings is projected at $2.16 per share, which implies an increase of approximately 213% from the projected year-ago earnings of 69 cents.

Centennial’s stock has increased 101.9% in a year. The Zacks Consensus Estimate for CDEV’s 2022 earnings per share (EPS) has been revised from $1.26 to $2.16, up about 71.4%, in the past 60 days.

Imperial Oil is valued at around $32.6 billion. The Zacks Consensus Estimate for Imperial Oil’s 2022 earnings is projected at $5.92 per share, up about 113% from the projected year-ago earnings of $2.78.

The Zacks Consensus Estimate for IMO’s 2022 EPS has been revised from $4.84 to $5.92, up about 22.3%, in the past 60 days. Imperial Oil’s stock has gone up 92.4% in a year.


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