Kirby Corporation Concludes Review of Strategic Alternatives for Distribution and Services Business; Remains Open to Opportunities to Maximize Shareholder Value
January 09 2023 - 7:00AM
Kirby Corporation (NYSE: KEX) ("Kirby" or the “Company”) today
announced its Board of Directors has concluded the Company’s review
of strategic alternatives for its Distribution and Services
business, which was initiated in early 2022.
The Kirby Board of Directors (the “Board”), with
the support of its independent financial and legal advisors,
reviewed a range of alternatives, including a sale or spin-off of
the Company’s Distribution and Services business, and held
discussions with a number of potential strategic and financial
counterparties. Following this process, the Board concluded that,
under current financial market conditions, the best path for Kirby
is to continue to execute its strategic plan for both its Marine
Transportation and Distribution and Services businesses. The Board
and management team remain open to reviewing any and all
opportunities that may maximize value for shareholders.
“Following a thorough review of strategic
alternatives, the Kirby Board determined that the best way to
enhance shareholder value is to continue to execute on the
strategic plan for both the Marine Transportation and Distribution
and Services businesses at this time,” said Joseph H. Pyne, Kirby’s
Chairman of the Board. “The M&A market continues to be
constrained by macroeconomic headwinds, including a challenging
financing environment. The Board remains committed to maximizing
value and will continue to evaluate all opportunities to do so,
consistent with its fiduciary duty to shareholders.”
As the industry’s most trusted marine
transportation and equipment distribution and services provider,
Kirby has deep operational expertise and unique capabilities that
position both of its businesses to deliver long-term growth and
enhanced performance. The Company’s financial strength is evidenced
by its investment-grade balance sheet and strong cash flow
generation. Looking ahead, Kirby expects that favorable conditions
for inland marine transportation and oil and gas markets will
support continued growth in demand for the Company’s products and
services. For Kirby’s Distribution and Services segment, the
Company expects demand for its new products that have been
developed as part of its electrification growth strategy,
especially for its environmentally friendly pressure pumping and
e-frac power generation equipment, to remain strong with growing
backlog of new orders and increased deliveries of new equipment
into 2023. Kirby continues to expect its businesses to deliver
improved financial results throughout 2023 as it maintains a
relentless focus on cost and capital management, while capitalizing
on growth opportunities and continuing to ensure safe, efficient,
and reliable operations.
David Grzebinski, Kirby’s President and Chief
Executive Officer, commented, “The Board and management team are
confident in Kirby’s prospects for continued profitable growth and
value creation, as underscored by our strong financial results and
operating performance in 2022. In Distribution and Services, our
markets remained strong throughout 2022 and contributed to Kirby’s
meaningful year-over-year growth in revenue and operating margin.
We are encouraged by the bright prospects of the Company’s two
segments and look forward to continuing to operate these businesses
from a position of strength. As always, we remain open-minded and
eager to consider strategic options to maximize value
creation.”
Advisors
Morgan Stanley & Co. LLC is serving as
Kirby’s strategic financial advisor, and Cravath, Swaine &
Moore LLP is serving as legal counsel.
Forward-Looking Statements
Statements contained in this press release that are not historical
facts, including, but not limited to, statements regarding the
future, business plans, strategic alternatives for business
segments and other statements that are not historical in nature 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 or dispositions
made by Kirby, and the impact of the COVID-19 pandemic and the
related response of governments on global and regional market
conditions. Forward-looking statements are based on currently
available information and Kirby assumes no obligation to update any
such statements, except as required by law. A list of additional
risk factors can be found in Kirby’s Annual Report on Form 10-K for
the year ended December 31, 2021 and in Kirby's subsequent filings
on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022
and September 30, 2022.
About Kirby Corporation Kirby
Corporation, based in Houston, Texas, is the nation’s largest
domestic tank barge operator transporting bulk liquid products
throughout the Mississippi River System, on the Gulf Intracoastal
Waterway, and coastwise along all three United States coasts. Kirby
transports petrochemicals, black oil, refined petroleum products
and agricultural chemicals by tank barge. In addition, Kirby
participates in the transportation of dry-bulk commodities in
United States coastwise trade. Through the distribution and
services segment, Kirby provides after-market service and genuine
replacement parts for engines, transmissions, reduction gears,
electric motors, drives, and controls, specialized electrical
distribution and control systems, energy storage battery systems,
and related equipment used in oilfield services, marine, power
generation, on-highway, and other industrial applications. Kirby
also rents equipment including generators, industrial compressors,
high capacity lift trucks, and refrigeration trailers for use in a
variety of industrial markets. For the oil and gas market, Kirby
manufactures and remanufactures oilfield service equipment,
including pressure pumping units, and manufactures electric power
generation equipment, specialized electrical distribution and
control equipment, and high capacity energy storage/battery systems
for oilfield customers.
Contact: Kurt Niemietz 713-435-1077
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