K-Sea Transportation Partners to Merge With Kirby Corporation
K-Sea Transportation Partners, L.P. (NYSE:KSP) announced on March 13, 2011 that it had reached a definitive agreement to merge with Kirby Corporation (NYSE:KEX), a Houston, Texas operator of inland tank barges and towing vessels which transports petrochemicals, black oil products, refined petroleum products and agricultural chemicals throughout the United States inland waterway system. Under the terms of the merger agreement, K-Sea will cease to be a PTP and become a wholly-owned subsidiary of Kirby. K-Sea's current management will continue to run its operations following the merger.
The total value of the transaction is approximately $600 million, consisting of $335 million for K-Sea’s equity and the refinancing of $265 million of K-Sea debt. Under the terms of the agreement, K-Sea's common unitholders will have the right to elect to receive either (a) $8.15 in cash; or (b) $4.075 in cash plus 0.0734 of a share of Kirby's common stock for each common unit. K-Sea's preferred unitholders will receive $4.075 in cash and 0.0734 of a share of Kirby's common stock for each preferred unit. K-Sea's general partner will receive $8.15 in cash for each general partner unit and $18 million in cash for K-Sea's incentive distribution rights.
K-Sea is one of the largest coastwise tank barge operators in the United States, with a fleet comprised of 58 tank barges with a capacity of 3.8 million barrels and 63 tugboats. It provides refined petroleum products transportation, distribution and logistics services in the domestic marine transportation market and is one of six MLPs currently engaged in shipping. Two other shipping MLPs, OSG America and U.S. Shipping Partners, left the market in 2009 after OSG America was repurchased by its parent and U.S. Shipping Partners converted to corporate form as a result of Chapter 11 proceedings.
- Click here to see K-Sea's press release announcing the agreement.
- Click here to see Kirby Corporation's press release announcing the agreement.