K-Sea Transportation Partners L.P. Announces Merger Agreement with Kirby Corporation
March 13 2011 - 2:00PM
Business Wire
K-Sea Transportation Partners L.P. (NYSE: KSP) (“K-Sea”)
announced today that they have entered into a definitive merger
agreement with Kirby Corporation (NYSE: KEX) (“Kirby”). Pursuant to
the terms of the agreement, K-Sea will become a wholly-owned
subsidiary of Kirby. The K-Sea management team will continue to run
the day-to-day operations of the coastwise tank barge business
after completion of the transaction.
The merger agreement was unanimously approved by K-Sea’s Board
of Directors, acting upon the unanimous recommendation of its
conflicts committee. Under the terms of the agreement, K-Sea’s
common unitholders will have the right to elect to receive either
(a) $8.15 in cash; or (b) $4.075 in cash plus 0.0734 of a share of
Kirby’s common stock for each common unit. K-Sea’s preferred
unitholders will receive $4.075 in cash and 0.0734 of a share of
Kirby’s common stock for each preferred unit. K-Sea’s general
partner will receive $8.15 in cash for each general partner unit
and $18 million in cash for K-Sea’s incentive distribution
rights.
The transaction price of $8.15 per K-Sea common unit represents
a 26% premium to the closing price on Friday, March 11th and a 38%
premium to the 30-day average closing price. The equity in the
transaction is valued at approximately $335.3 million based on
approximately 38.9 million units outstanding, and is expected to
close in the second or third calendar quarter of 2011.
President and CEO, Timothy J. Casey said “Kirby’s record of
long-term growth and delivering shareholder value is among the best
in the maritime industry, not only in the U.S. but also arguably
throughout the world. The company is admired and respected by
customers and competitors alike. K-Sea’s management is excited to
partner with the Kirby organization, and is delighted our
unitholders have the opportunity to elect to become shareholders of
Kirby. We look forward to working with Kirby’s management and
seeing the business opportunities that the combination will likely
provide K-Sea.”
In connection with this transaction, KA First Reserve, LLC and
certain affiliates of Jeffries Capital Partners have entered into
support agreements pursuant to which they have agreed to vote their
K-Sea units in favor of the merger. These entities currently hold
all of K-Sea’s outstanding preferred units and approximately 59.9%
of its outstanding common units (including the outstanding
preferred units on an as-converted basis), which is a sufficient
number of units to approve the merger.
UBS Investment Bank acted as financial advisor to K-Sea and
Stifel, Nicolaus & Company, Incorporated acted as financial
advisor to K-Sea’s Conflicts Committee. Latham & Watkins LLP
acted as legal counsel to K-Sea and DLA Piper acted as legal
counsel to K-Sea’s Conflicts Committee.
About K-Sea Transportation Partners L.P.
K-Sea is one of the largest coastwise tank barge operators in
the United States. The Company provides refined petroleum products
transportation, distribution and logistics services in the U.S.
domestic marine transportation market, and its common units trade
on the New York Stock Exchange under the symbol KSP. For additional
information, please visit the Company’s website, including the
Investor Relations section, at www.k-sea.com.
About Kirby Corporation
Kirby, 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 the 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.
Additional Information
In connection with the proposed merger, Kirby will file with the
Securities Exchange Commission (“SEC”) a registration statement on
Form S-4 that will include a proxy statement of K-Sea and a
prospectus of Kirby. The definitive proxy statement/prospectus will
be mailed to the unitholders of K-Sea. INVESTORS ARE URGED TO
CAREFULLY READ THE REGISTRATION STATEMENT AND THE PROXY
STATEMENT/PROSPECTUS AND OTHER MATERIALS REGARDING THE PROPOSED
MERGER WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT KIRBY AND K-SEA AND THE PROPOSED
TRANSACTION. Investors may obtain a free copy of Kirby’s
registration statement on Form S-4 and the proxy
statement/prospectus when they are available and other documents
containing information about Kirby and K-Sea, without charge, at
the SEC’s web site at www.sec.gov. Copies of the proxy
statement/prospectus and the filings with the SEC that will be
incorporated by reference in the proxy statement/prospectus can
also be obtained, when available, without charge, from K-Sea’s
website at www.k-sea.com.
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
Participants in Solicitation
K-Sea and its directors, officers and certain other members of
management may be deemed to be participants in the solicitation of
proxies from K-Sea’s unitholders in respect of the proposed merger.
Information about these persons can be found in K-Sea’s annual
report on Form 10-K for the year ended June 30, 2010, as filed with
the SEC on September 13, 2010. Additional information about the
interests of such persons in the solicitation of proxies in respect
of the merger will be included in the registration statement and
the proxy statement/prospectus to be filed with the SEC in
connection with the proposed merger.
Forward-Looking Statements
This document includes “forward-looking statements” as defined
by the SEC. All statements, other than statements of historical
fact, included herein that address activities, events or
developments that K-Sea expects, believes or anticipates will or
may occur in the future, including anticipated benefits and other
aspects of the proposed merger, are forward-looking statements.
These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially,
including the possibility that the merger will not be completed in
the third calendar quarter of 2011, the possibility that the
anticipated benefits from the proposed mergers cannot or will not
be fully realized, the possibility that costs or difficulties
related to integration of the two companies will be greater than
expected, the impact of competition and other risk factors included
in the reports filed with the SEC by K-Sea. Readers are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of their dates. Except as required by law,
K-Sea does not intend to update or revise its forward-looking
statements, whether as a result of new information, future events
or otherwise.
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