Kirby Corporation (NYSE:KEX) announced Tuesday that it has entered into an agreement to purchase tug and barge operator Allied Transportation Company for $116 million.
The deal includes the transfer of assets from Allied Transportation Company, a subsidiary of Allied Marine Industries, and two other affiliated companies. Allied is an operator of offshore barges and tugboats dealing in the coastal transportation of petrochemicals, as well as dry sugar products, in the Northeast, Atlantic and Gulf Coast regions of the United States.
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.
Kirby says that the purchase will be financed through the company’s revolving credit facility that was increased last week 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, Kirby says.
Joe Pyne, Kirby’s Chairman and Chief Executive Officer, commented, “We are very pleased to announce our agreement with Allied. Operating as a U.S. Jones Act carrier primarily in the offshore petrochemical business, Allied 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.”
Kirby Corporation, based in Houston, Texas, is the nation’s largest domestic tank barge operator representing approximately 27% of the U.S. inland tank barge capacity with a fleet of 818 tank barges and 240 towboats.
Today’s purchase announcement is the latest in Kirby’s historically aggressive acquisition strategy. In 2011 alone the company completed the purchase of Seaboats, Inc., K-Sea Transportation Partners, and United Holdings LLC., as well as 21 inland and offshore tank barges and 15 inland towboats and offshore tugboats from Enterprise Marine Services LLC.