Houston-headquartered Kirby Corporation (NYSE: KEX) reports that it has signed of a definitive agreement to acquire the inland tank barge and towboat fleet of Savage Inland Marine for approximately $278 million in cash and the assumption of leases.
Savage’s tank barge fleet consists of 90 inland tank barges with approximately 2.5 million barrels of capacity and 46 inland towboats. Savage primarily moves petrochemicals, refined products, and crude oil on the Mississippi River, its tributaries, and the Gulf Intracoastal Waterway.
Savage also operates a significant ship bunkering business as well as barge fleeting services along the Gulf Coast. The closing of the acquisition is expected to occur late in the first quarter of 2020 and is subject to customary closing conditions and regulatory approvals. The purchase will be financed through additional borrowings.
Confirming the agreement, Savage said that, once completed, the transaction would provide increased flexibility to grow its business in alignment with itsstrategy, values, and ongoing commitment to safe, reliable and responsible operations.
“Savage will continue to provide inland marine services to Customers until the transaction is completed,” said the company. “Our offshore marine business and shore side services for some existing customers including dock operations, management, and logistics are unaffected by this agreement, and will remain an important part of our service offerings going forward.
David Grzebinski, Kirby’s President and Chief Executive Officer, commented, “ “The purchase of Savage’s inland tank barge and towboat fleet represents an excellent strategic addition to Kirby’s inland marine fleet with young, well-maintained vessels. In the last few years, Savage has built a diverse and well-respected inland marine transportation business with a strong presence in towing, bunkering, and fleeting along the Gulf Coast. These operations complement Kirby’s inland business very well and will enable us to better service our customer’s towing and fleeting needs. Further, Savage’s ship bunkering business in New Orleans is an ideal expansion of Kirby’s existing bunkering operations in Texas and Florida, and gives Kirby the ability to service bunker customers in this important Gulf Coast port.
Kirby made the announcement of the Savage acquisition in connection with the release of its fourth quarter 2019 financials, reporting net earnings ] for the fourth quarter ended December 31, 2019 of $2.8 million or $0.05 per share, compared with a net loss of ($24.4) million or ($0.41) per share for the 2018 fourth quarter.
Excluding one-time charges in both quarters, 2019 fourth quarter net earnings attributable to Kirby were $34.5 million or $0.58 per share, compared with $44.9 million or $0.75 per share for the 2018 fourth quarter.
Consolidated revenues for the 2019 fourth quarter were $655.9 million compared with $721.5 million reported for the 2018 fourth quarter.
For the 2019 full year, Kirby reported net earnings of $142.3 million or $2.37 per share, compared with $78.5 million or $1.31 per share for 2018. Excluding one-time items in both years, 2019 net earnings were $174.0 million or $2.90 per share, compared with $171.4 million or $2.86 per share for 2018. Consolidated revenues for 2019 were $2.84 billion compared with $2.97 billion for 2018.