March 3, 2006
Kirby buys out partner in Dixie Fuels
Kirby Corporation (NYSE: KEX) says that its wholly owned subsidiary, Dixie Offshore Transportation Company, has purchased from Progress Fuels Corporation ("PFC") the remaining 65% interest in Dixie Fuels Limited ("Dixie Fuels"), a general partnership, for $15.6 million in cash.
Prior to the purchase, Dixie Fuels, formed in 1977, was 65% owned by PFC and 35% owned by Kirby.
The final purchase price will be determined based on post-closing working capital adjustments and drydocking expenditures.
Dixie Fuels operates a fleet of four offshore dry-bulk barge and tugboat units operating under long-term contracts with Progress Energy Florida, Inc., an affiliate of PFC, and Holcim (US) Inc.
Dixie Fuels primarily transports coal from the lower Mississippi River to the Progress power generation facility at Crystal River, Florida. Its contract with Holcim is a backhaul of limestone rock from Crystal River to Holcim's Theodore, Alabama cement manufacturing plant.
Financing of the acquisition was through a combination of cash and borrowings from Kirby's existing credit facility.
Joe Pyne, Kirby's President and Chief Executive Officer, commented, "Kirby subsidiaries have served as the managing partner of Dixie Fuels since the partnership's inception in 1977, accounting for our 35% interest under the equity method of accounting. For the 2005 year, Dixie Fuels' revenues were $26 million. The acquisition will not have a material impact on Kirby's earnings in 2006 due to large scheduled maintenance requirements."