Kirby Closes K-Sea Acquisition
K-Sea fleet is comprised of 58 tank barges with a capacity of 3.8 million barrels and 63 tugboats that operates along the East Coast, West Coast and Gulf Coast of the US, as well as in Alaska and Hawaii. Of its tank barge fleet, 54 are doubled hulled and has an average age of approximately nine years.
The total value of the transaction is about $604m (before transaction fees) that consists of $228m of cash paid to K-Sea common and preferred unit holders and the general partner, $263m of cash to retire K-Seaâ€™s outstanding debt, and $113m by issuance of approximately 1,939,000 Kirby shares common stock valued at $58.28 per share.
The total transaction was financed by a combination of a new $540m bank term loan and the issuance of Kirby common stock.
Headquartered in East Brunswick, New Jersey, the customers of K-Sea include major oil companies and refiners, many of which are current Kirby customers for inland tank barge services.
Joe Pyne, CEO of Kirby, said: â€œWe are very pleased to announce our agreement with K-Sea subject to their unitholdersâ€™ approval. K-Sea is uniquely well positioned within the U.S. coastwise tank barge business, and will be a terrific complement to Kirbyâ€™s existing inland tank barge transportation service.
â€œK-Sea has a very strong management team led by Tim Casey, great customer relationships, and a good operating reputation in the industry. The Kirby management team looks forward to working with Tim Casey and his management team as we continue to grow Kirby and enhance our shareholdersâ€™ value.â€
In March 2011, Kirby has signed an acquisition agreement with K-Sea Transportation Partners, pursuant to which a subsidiary of Kirby will merge with K-Sea.
Kirby operates inland tank barges and towing vessels, transporting petrochemicals, black oil products, refined petroleum products and agricultural chemicals throughout the US inland waterway system. It also owns and operates four ocean-going barge and tug units transporting dry-bulk commodities in US coastwise trade.
K- Sea is an operator of tank barges and tugboats participating in the coastwise transportation primarily of refined petroleum products in the US.
Will the acquisition commercially benefit Kirby?
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