Kirby Corp. has completed the acquisition of Stewart & Stevenson LLC for approximately US$756.5 million, before post-closing adjustments.
The purchase was funded with 5.7 million shares of Kirby common stock valued at US$366.6 million and US$377 million in cash through Kirby's revolving credit facility, as well as assumed debt of US$12.9 million. The cash consideration includes an adjustment for working capital due to increased receivables and inventory, and the assumed debt is for additional property.
David W. Grzebinski, Kirby's President and Chief Executive Officer, said: "We are pleased to welcome the employees of Stewart & Stevenson to Kirby, and are excited to begin realising the benefits of the combined distribution and services business. While purchase price allocations are not final, we expect the transaction to be US$0.02 - US$0.04 per share accretive to 2017 fourth quarter earnings. The market continues to develop favourably as reflected by the increase in working capital levels.”
Kirby also confirmed that Hurricanes Harvey and Irma caused little damage to its vessels and minor flooding to one facility. Mr Grzebinski said: "I commend all of our operations and vessel personnel who saw us through the hurricanes safely, and I am grateful for the support work of our shoreside staff. Though many of our colleagues have experienced significant damage to their homes and property, we are thankful that all Kirby employees and their families emerged unharmed from the storms.
“Harvey has significantly dislocated normal supply and distribution routes in our inland barge business. Ports from Corpus Christi to Houston started closing on 23 August, and began reopening on 1 September. The storm also disrupted over 50% of US petrochemical capacity and over 25% of refinery capacity, though many plants have returned to normal operations. Irma has also significantly disrupted our offshore business."
Mr Grzebinski continued: "We expect lost revenues and costs associated with recovery efforts for both hurricanes to impact third quarter earnings by US$0.06 - US$0.08 per share. For Harvey, the lost revenues have been partially offset by an increase in our vessel utilisation as the US Gulf Coast petrochemical and refinery complex returns to normal operations. As such, we believe third quarter earnings results will fall within our previously provided guidance range, although towards the low end after the negative impact from the storms."
Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/14092017/kirby-acquires-stewart-stevenson/