Kirby Acquires higman marine

Kirby to Acquire Tank Barge Shipping Company Higman Marine for $419 Million

Total Views: 38
February 5, 2018

Kirby Acquires higman marine

Houston-based Kirby Corporation (NYSE: KEX) on Monday announced it has signed a definitive agreement to acquire inland tank barge shipping company Higman Marine, Inc. and its affiliated companies for approximately $419 million in cash.

Houston-based Higman Marine’s fleet consists of 159 inland tank barges with 4.8 million barrels of capacity and 75 inland towboats. Its operations primarily consist of moving petrochemicals, refined petroleum products, crude oil, natural gas condensate, and black oil on the Mississippi River System and Gulf Intracoastal Waterway for large midstream and global integrated oil companies.

The closing of the acquisition is expected to occur in the first quarter of 2018 and is subject to customary closing conditions.

David Grzebinski, Kirby’s President and Chief Executive Officer, commented, “The acquisition of Higman and its young fleet of well-maintained inland tank barges and towboats is an excellent fit with Kirby’s operations.

“Higman’s inland fleet of 30,000 barrel tank barges, approximately 80% of which are clean and 20% heated black oil vessels, has an average age of seven years, and is one of the younger fleets in the industry. With an average age of seven years, the addition of Higman’s towboats to Kirby’s horsepower profile will allow us to avoid significant future capital outlays for new towboats,” Mr. Grzebinski added.

Kirby said the approximate $419 million closing price will be paid in cash and financed through additional borrowings.

Mr. Grzebinski continued, “Depending on the purchase price allocations, we expect this acquisition will be earnings neutral in 2018 as it will take time to align Higman’s tank barge utilization rates with Kirby’s, and industry pricing has not yet improved from historically low levels. Additionally, while debt levels will increase in the near term, Kirby’s financial policies remain unchanged, and we expect to rapidly deleverage post-acquisition, which is consistent with our history.

“Overall, as the inland market begins its recovery, the timing of the Higman acquisition is ideal as it will further upgrade our fleet and ultimately allow Kirby to emerge from the downturn larger, more efficient, and better able to serve our customers. As the cycle improves, and we realize the benefits of integration efficiencies and synergies, this acquisition will improve the earnings potential for Kirby in the future,” concluded Grzebinski.

Back to Main