HOUSTON, March 13, 2011 /PRNewswire/ -- Kirby Corporation
("Kirby") (NYSE: KEX) announced today that it has entered into an
agreement with K-Sea Transportation Partners L.P. ("K-Sea") (NYSE:
KSP), an operator of tank barges and tugboats participating in the
coastwise transportation primarily of refined petroleum products in
the United States, pursuant to
which a subsidiary of Kirby will merge with K-Sea, with K-Sea
surviving the merger as a wholly owned subsidiary of Kirby. The
total value of the transaction is approximately $600 million (before post-closing adjustments and
fees) and will consist of cash, Kirby common stock and the
refinancing of K-Sea debt.
The transaction will be financed through a combination of
available cash, borrowing under Kirby's revolving credit facility,
a new bank term loan of up to $540
million and the issuance of Kirby common stock. The
closing of the transaction is expected to occur in June or
July 2011 and is subject to certain
conditions, including approval by K-Sea's unitholders and the
expiration of the required waiting period under the
Hart-Scott-Rodino Act. The holders of a majority of the
outstanding K-Sea units, which is a sufficient number of units to
approve the merger, have entered into support agreements with Kirby
pursuant to which they have agreed to vote their units in favor of
the merger.
Under the terms of the agreement, the total value of the
transaction is approximately $600
million, consisting of $335
million for K-Sea's equity and the refinancing of
$265 million of K-Sea debt.
K-Sea's common and preferred unitholders will receive
$8.15 per unit in consideration in
the form of cash and Kirby common stock. K-Sea's common
unitholders will have the election to receive for each common unit
either $8.15 in cash or $4.075 in cash and 0.0734 of a share of Kirby
common stock. K-Sea's preferred unitholders will receive for
each preferred unit $4.075 in cash
and 0.0734 of a share of Kirby common stock. K-Sea's general
partner will receive $8.15 in cash
for each general partner unit and $18
million in cash for its incentive distribution rights.
K-Sea's fleet, comprised of 58 tank barges with a capacity of
3.8 million barrels and 63 tugboats, operates along the East Coast,
West Coast and Gulf Coast of the United
States, as well as in Alaska and Hawaii. K-Sea's tank barge fleet, 54 of
which are doubled hulled, has an average age of approximately nine
years and is one of the youngest fleets in the coastwise trade.
K-Sea's customers include major oil companies and refiners,
many of which are current Kirby customers for inland tank barge
services. Headquartered in East
Brunswick, New Jersey, K-Sea has major operating facilities
in New York, Philadelphia, Norfolk, Seattle and Honolulu.
Joe Pyne, Kirby's Chief Executive
Officer, commented, "We are very pleased to announce our agreement
with K-Sea subject to their unitholders' approval. K-Sea is
uniquely well positioned within the U.S. coastwise tank barge
business, and will be a terrific complement to Kirby's existing
inland tank barge transportation service. With one of the youngest
and largest fleets in its sector, K-Sea stands to benefit from the
retirement of older tank barges in the coastwise trade, so we
believe that the timing of this transaction is very favorable.
K-Sea is a great foundation from which to expand our liquid
transportation business into the U.S. Jones Act coastwise trade and
better serve our customers. K-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 shareholders' value."
Mr. Pyne further commented, "We expect the positive earnings
impact from K-Sea on our 2011 results will be offset by one-time
transaction fees of approximately $.05 per share. Accordingly, our guidance
for 2011 remains in the $2.55 to
$2.80 per share range. Projected full calendar year
2011 revenues for K-Sea are anticipated to be in the $240 to $280 million range. Assuming a
closing in July, anticipated revenues for Kirby from K-Sea's
operations would be in the $130 to $150
million range. For 2012, we expect a positive
contribution to earnings from K-Sea's operations."
Kirby has scheduled a conference call for 10:00 a.m. central time on Monday, March 14, 2011, to discuss the K-Sea
acquisition. 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 29294792. An
audio playback will be available at 1:00
p.m. central time on Monday, March
14, through 6:00 p.m. central
time on Friday, April 15,
2011, by dialing 888-843-7419 for domestic and 630-652-3042
for international callers. Kirby's webcast and playback of
the conference call will be accessible on its 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.
In connection with the proposed merger, Kirby will file with the
Securities and 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 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, from
the SEC's website 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 Kirby's
website at www.kirbycorp.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 any 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.
Kirby and its directors, executive officers and certain other
persons may be deemed to be participants in the solicitation of
proxies with respect to the proposed transaction. Information
about Kirby's directors and executive officers is available in
Kirby's Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on
February 25, 2011, and its proxy
statement for its 2010 Annual Meeting of Stockholders, filed with
the SEC on March 10, 2010.
Other information about the participants in the proxy
solicitation for the proposed transaction will be contained in the
proxy statement/prospectus and other materials to be filed with the
SEC in connection with the proposed transaction.
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,
2010, filed with the Securities and Exchange Commission.
SOURCE Kirby Corporation