Kirby Corporation (NYSE: KEX) is signaling that it still has an appetite to find growth. The company is based in Houston and caters to the petrochemicals industries by transporting bulk liquids via barges. Now the company has announced reaching an agreement to purchase the inland tank barge fleet of SEACOR Holdings Inc. for approximately $88 million in cash.
Kirby is the nation’s largest domestic tank barge operator.
The asset purchase will consist of 27 inland 30,000 barrel tank barges and 13 inland towboats. Also included is one 30,000 barrel tank barge and one towboat currently under construction.
As far as how this compares to Kirby as a whole, this would be considered a bolt-on deal. Kirby;s 2015 revenue was $2.14 billion and its operating profit was $380 million. Kirby’s market cap was $3.1 billion after a 6% share price drop on Tuesday.
Kirby’s Marine Transportation segment had a fleet as of February 19, 2016 as follows: owned or operated 898 inland tank barges with 17.9 million barrels of capacity, 243 inland towboats, 70 coastal tank barges with 6 million barrels of capacity, 73 coastal tugboats, 6 offshore dry-bulk cargo barges, 7 offshore tugboats, and 1 docking tugboat.
Kirby said in its release that it will also transfer to Seacor the ownership of one Florida-based ship docking tugboat. Seacor transports refined petroleum products, petrochemicals and black oil on the Mississippi River System and Gulf Intracoastal Waterway.
The closing of the asset purchase is expected to occur early in the second quarter of 2016. Kirby will pay for the deal by using funds available under its revolving credit facility.
David Grzebinski, Kirby’s President & CEO, said:
The purchase of the Seacor inland tank barge and towboat fleet further expands our inland marine fleet with well-maintained and recently constructed vessels. Operating primarily in the refined products trade, these assets will be complementary to our existing fleet and will allow us to continue to enhance customer service.
Kirby shares closed down 6.1% at $57.78 on Tuesday. Its consensus analyst price target is $55.00 and its 52-week trading range is $44.63 to $84.24.
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