UPDATE: Wunderlich Securities Reiterates Buy Rating, Raises PT on New Source Energy Partners LP as Services Acquisition Bolsters Cash Flow

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In a report published Friday, Wunderlich Securities analyst Abhishek Sinha reiterated a Buy rating on
New Source Energy Partners LPNSLP
, and raised the price target from $25.00 to $28.00. In the report, Wunderlich Securities noted, “New Source Energy Partners L.P. (NSLP) announced yesterday after the close that it has acquired Erick Flowback Services (EFS) and Rod's Production Services (RPS), both based in Oklahoma, for a total purchase price of $116.8 million, consisting of $57.3 million from cash contribution, $42.7 million from the Partnership's common units, and $16.8 million of debt. The former owners are also entitled to earn additional consideration in the second quarter of 2015. Based on our estimates, the additional consideration is around $20mm, netting the total acquisition cost to $137mm. The company expects around $32mm of EBITDA in 2014 (annualized) implying a multiple of 4.3x. Incorporating the new acquisition to our model drives up our price target to $28, up from $25.” New Source Energy Partners LP closed on Thursday at $23.45.
Posted In: Analyst ColorPrice TargetAnalyst RatingsAbhishek SinhaWunderlich Securities
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