July 9, 2007
Kirby buys Gulf Coast diesel service specialist
Kirby Corporation (NYSE: KEX) is expanding its diesel services business.
It announced today that its wholly owned subsidiary, Marine Systems, Inc., has agreed to purchase substantially all of the assets of Saunders Engine and Equipment Company, Inc. ("Saunders"), a privately held Gulf Coast high-speed diesel engine services provider, for approximately $13.2 million in cash, subject to post-closing inventory and other adjustments.
Houston-based Kirby, operates inland tank barges and towing vessels throughout the inland waterway system plus four ocean-going barge and tug units in the 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
The purchase of Saunders is anticipated to close on or before July 20, 2007. Saunders, established in 1959 and headquartered in Mobile, Alabama, operates factory-authorized full service marine dealerships for Cummins and Detroit Diesel engines, and serves as an authorized marine dealer for Caterpillar engines in Alabama.
Saunders' principal customers are Gulf Coast inland waterway carriers and general marine companies. In 2006, Saunders generated revenues of approximately $18 million.
The acquisition will be financed using Kirby's existing revolving credit facility.
Joe Pyne, Kirby's President and Chief Executive Officer, commented, "The acquisition of Saunders is consistent with our strategy to expand Kirby's Gulf Coast high-speed service capabilities for our customers geographically, and is complimentary to our Global Power Holding Company and Marine Engine Specialists, Inc. acquisitions made in 2006. We expect the purchase of Saunders to be marginally accretive to Kirby's 2007 net earnings and cash flows."