Kirby Buys Hollywood Marine, TriggersDebt Fears
August 5, 1999
Kirby Corp, the largest U.S. tank barge operator, recently agreed to buy Hollywood Marine Inc., an inland tank barge company based in Houston, Texas, for about $325 million. While the company views Hollywood's operations as complementary to its core inland tank barge operations, some analysts were immediately skeptical of the effects on Kirby's bottom line.
Standard & Poor's placed its triple-'B' corporate credit and senior unsecured debt ratings for Kirby Corp. on CreditWatch with negative implications. The CreditWatch listing reflects an increased debt burden that Kirby will incur as a result of its acquisition of Hollywood Marine Inc.
As part of the deal, Kirby said it would name C. Berdon Lawrence, Hollywood Marine's president and principle shareholder, as chairman of Kirby and make its current chairman, George Peterkin, chairman emeritus. Kirby owns 511 barges and carries industrial chemicals, petroleum products and agricultural chemicals throughout the U.S.'s inland waterway system. Hollywood Marine owns 256 barges operating along the Gulf Intracoastal Waterway and the lower Mississippi River and earned revenues of $168 million in 1998.
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