HOUSTON, Feb. 21, 2011 /PRNewswire/ -- Kirby Corporation
("Kirby") (NYSE: KEX) announced today that it has signed an
agreement to purchase United Holdings LLC ("United"), a distributor
and service provider of engine and transmission related products
for the oil and gas services, power generation and transportation
industries, and manufacturer of oilfield service equipment. The
base purchase price is $270 million
in cash (before post-closing adjustments), plus a three-year
earnout provision for up to an additional $50 million payable in 2014. United,
headquartered in Oklahoma City,
Oklahoma with 21 locations across 13 states, distributes and
services equipment and parts for Allison Transmission, MTU Detroit
Diesel Engines, Daimler Trucks NA, and other diesel and natural gas
engines. United also manufactures oilfield service equipment,
including hydraulic fracturing equipment. United's principal
customers are oilfield service companies, oil and gas operators and
producers, compression service companies and transportation
companies. The acquisition will be financed using Kirby's
existing cash and revolving credit facility. The closing of
the acquisition is expected to occur in April 2011 and is subject to certain conditions,
including the expiration of the required waiting period under the
Hart-Scott-Rodino Act.
Joe Pyne, Kirby's Chief Executive
Officer, commented, "The recovery of shale gas is an energy "game
changer" for the United States
energy business because of the estimated amount of gas reserves and
the relatively inexpensive cost of gas. A critical component
of recovering shale gas is the ability to hydraulically fracture
shale formations. United manufactures the hydraulic fracturing
units and services the components which are high-speed diesel
engines, transmissions and pumps, many of the same components used
by our marine customers. United also manufactures gas
compressors, pump jack power packages, cementers, blenders and
nitrogen pumpers."
Mr. Pyne continued, "United is a logical extension of our diesel
engine services business into the land based diesel engine and
transmission services business. There is currently estimated
to be 10 million horsepower employed in the North America hydraulic fracturing business
with additional horsepower forecast to be added in the future.
United is well positioned to benefit from a strong onshore service
market going forward, especially in the servicing and parts
distribution of engines and transmissions used in the oil and gas
industry. The overhaul cycle for fracturing equipment is
estimated to be twice as frequent as diesel engines used for marine
propulsion. United is a 73 year old company with operating
facilities located in the middle of the shale gas area. United has
a strong and experienced management team and excellent long-term
customer relationships. We are very excited about having United as
part of our diesel engine services business, and adding the new
capability that United will bring to Kirby's operations."
Mr. Pyne further commented, "We expect the purchase of United to
be immediately accretive to our 2011 net earnings and cash flows.
Projected full year 2011 revenues for United are anticipated
to be in the $375 to $450 million
range, generating projected full year net earnings in the
$.20 to $.25 per share range.
Assuming a closing in April
2011, anticipated revenues for Kirby from United's
operations would be in the $285 to $335
million range, generating net earnings in the $.15 to $.20 per share range. Kirby's
revised 2011 year guidance range, assuming the United acquisition
and $.05 per share of earnings from
the purchase of the Enterprise Marine Services ship bunkering
operations announced earlier this month, is $2.55 to $2.80 per share, up from the previously
announced guidance range for 2011 of $2.35
to $2.55 per share."
Kirby has scheduled a conference call for 10:00 a.m. central time on Tuesday, February 22, 2011, to discuss the United
acquisition. Kirby's live webcast, featuring a slide
presentation, may be accessed at http://www.kirbycorp.com.
The conference call number is 800-446-1671 for domestic
callers and 847-413-3362 for international callers. The
leader's name is Steve Holcomb.
The confirmation number is 29138061. An audio playback
will be available at 1:00 p.m. central
time on Tuesday, February 22,
through 6:00 p.m. central time on
Friday, March 25, 2011, by dialing
888-843-7419 for domestic and 630-652-3042 for international
callers. A replay of the webcast will be available after the
call by visiting Kirby's website at http://www.kirbycorp.com.
Kirby Corporation, based in Houston,
Texas, operates inland tank barges and towing vessels,
transporting petrochemicals, black oil products, refined petroleum
products and agricultural chemicals throughout the United States inland waterway system.
Kirby also owns and operates four ocean-going barge and tug
units transporting dry-bulk commodities in United States coastwise trade. Through
the diesel engine services segment, Kirby provides after-market
service for medium-speed and high-speed diesel engines and
reduction gears used in marine, power generation and railroad
applications.
Statements contained in this press release with respect to the
future are forward-looking statements. These statements
reflect management's reasonable judgment with respect to future
events. Forward-looking statements involve risks and
uncertainties. Actual results could differ materially from
those anticipated as a result of various factors, including
cyclical or other downturns in demand, significant pricing
competition, unanticipated additions to industry capacity, changes
in the Jones Act or in U.S. maritime policy and practice, fuel
costs, interest rates, weather conditions, and timing, magnitude
and number of acquisitions made by Kirby. Forward-looking
statements are based on currently available information and Kirby
assumes no obligation to update such statements. A list of
additional risk factors can be found in Kirby's annual report on
Form 10-K for the year ended December 31,
2009, filed with the Securities and Exchange Commission.
SOURCE Kirby Corporation