Kirby Corp., the nation's largest domestic tank barge operator, said it has entered into an agreement to purchase the assets of Allied Transportation Co., a subsidiary of Allied Marine Industries, and two affiliated companies.
Allied is an operator of offshore barges and tugboats participating in the coastal transportation of petrochemicals, as well as dry sugar products, in the Northeast, Atlantic and Gulf Coast regions of the United States. Customers include major petrochemical companies, most of which are current Kirby customers for inland tank barge services.
Allied's fleet consists of 10 coastwise tank barges with a total liquid capacity of 680,000 barrels, three offshore dry-bulk barges with a total capacity of 48,000 deadweight tons, and seven tugboats. The total value of the cash transaction is anticipated to be $116 million before post-closing adjustments and fees). That figure includes $10 million to be paid contingent on developments with the sugar provisions in the U.S. Farm Bill.
The purchase will be financed through Kirby's revolving credit facility. Last week, Kirby received the consent and commitment from participating banks to increase its unsecured revolving credit facility from $250 million to $325 million. The closing of the Allied transaction is expected to occur in the late third or early fourth quarter of 2012 and is subject to certain conditions, including expiration of the required waiting period under the Hart-Scott-Rodino Act.
Joe Pyne, Kirby's chairman and chief executive officer, said Allied, operating as a U.S. Jones Act carrier, "has one of the most complementary coastal fleets to Kirby's existing coastal and inland operations. In addition to enhancing Kirby's ability to expand and strengthen certain existing customer relationships, the acquisition of Allied provides Kirby with a strong footprint from which to grow the petrochemical segment of our offshore business." - Chris Dupin