Crestwood Equity Partners LP (NYSE: NYSE:CEQP) has received an endorsement from Glass Lewis & Co. for its proposed transaction with Energy Transfer LP (NYSE: NYSE:ET), slated for a special meeting of unitholders on October 30, 2023. The support from Glass Lewis, a leading independent proxy advisory firm, is seen as a significant step towards the completion of the merger.
According to InvestingPro data, Crestwood boasts a market cap of $2.99 billion USD and a P/E ratio of 29.19. The company has seen a revenue of $5253.2 million USD, despite a decrease in revenue growth by 6.83% in the last twelve months. Meanwhile, Energy Transfer, with a market cap of $44.03 billion USD and a P/E ratio of 11.56, has generated a revenue of $80.75 billion USD, also experiencing a slight decline in revenue growth by 1.23% in the same period.
Glass Lewis stated that the merger would allow Crestwood and its shareholders to mitigate inherent risks and create strong value, transitioning from their current standalone status. This endorsement aligns with the views of Institutional Shareholder Services (ISS), another influential proxy advisor, which also backs the proposed transaction.
InvestingPro Tips suggests that Crestwood has consistently increased earnings per share and its net income is expected to grow this year. The company also pays a significant dividend to shareholders and has maintained dividend payments for 11 consecutive years. On the other hand, Energy Transfer, a prominent player in the Oil, Gas and consumable Fuels industry, has high earnings quality, with free cash flow exceeding net income, and has maintained dividend payments for 18 consecutive years.
Crestwood expressed contentment with the endorsement, seeing it as validation of their belief in the long-term success of the transaction and the benefits it will bring to their unitholders in the combined company. The deal, which is unanimously recommended by all parties involved, is expected to close in Q4 2023, initiating Crestwood's growth journey. This is, pending unitholder approval and standard closing prerequisites.
The proposed merger between Crestwood and Energy Transfer comes at a time when energy companies are seeking ways to consolidate resources and streamline operations in an increasingly competitive market landscape. The deal is expected to provide Crestwood with a stronger foothold in the industry while offering its shareholders significant value-creation opportunities. For more insightful tips and real-time metrics, check out InvestingPro.
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