Williams (WMB) To Buy Common Units From Williams Partners

Oklahoma-based pipeline company, Williams Companies, Inc. (NYSE:WMB) , has agreed to procure approximately 6.975 million common units priced at $35.84 each from its master limited partnership, Williams Partners L.P. (NYSE:WPZ) . The purchase, which is expected to be made via private placement, is expected to be worth $250 million.

The private placement is part of the larger plan that the duo announced in conjunction with their second-quarter earnings results at the beginning of the month. The deal is aimed atenhancing value, boosting credit profiles and financing the development of a significant portfolio of fee-based growth projects at Williams Partners.

The net proceeds raised from this transaction will be used by Williams Partners to repaythe outstanding amount under its credit facility and for general partnership purposes. This deal will increase Williams Companies’ aggregate ownership interest, including the general partner interest, in Williams Partners to approximately 60%.

WILLIAMS COS Price

Tulsa, OK-based Williams Companies is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing and transportation of natural gas. The company boasts a widespread pipeline system and is one of the largest domestic transporters of natural gas by volume.

Recently, Williams Companies reported decent second-quarter 2016 earnings on the back of significant cost reductions and continued improvement in financial performance. The company reported adjusted earnings from continuing operations of 19 cents per share, in line with the Zacks Consensus Estimate. Moreover, the bottom line improved from the prior-year figure of 15 cents per share.

Presently, Williams Companies carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.

Investors may take a look at some better-ranked players from the energy sector like NGL Energy Partners LP (NYSE:NGL) and Devon Energy Corporation (NYSE:DVN) , both of which sport a Zacks Rank #1 (Strong Buy).