Kirby to Acquire Savage Inland Marine Fleet
Houston-based Kirby Corporation said it has signed a definitive agreement to acquire Savage Inland Marine's towboat and tank barge fleet for approximately $278 million in cash and the assumption of leases.
Kirby will acquire Savage's inland fleet consisting of 46 towboats and 90 tank barges with approximately 2.5 million barrels of capacity, primarily used for transporting petrochemicals, refined products and crude oil on the Mississippi River, its tributaries and the Gulf Intracoastal Waterway. Kirby will also take over Savage's ship bunkering business and barge fleeting services along the Gulf Coast.
Kirby, which announced the acquisition in its latest earnings report on Thursday, said it will finance the transaction through additional borrowings.
Savage confirmed the deal in an announcement on its website and said it will continue to provide inland marine services until the transaction is completed. It added that its offshore marine business and certain shoreside services including dock operations, management and logistics are unaffected by the agreement.
The acquisition is expected to close late in the first quarter of 2020, subject to customary closing conditions and regulatory approvals.
David Grzebinski, Kirby’s president and chief executive officer, said, "The purchase of Savage’s inland tank barge and towboat fleet represents an excellent strategic addition to Kirby’s inland marine fleet with young, well-maintained vessels.
"In the last few years, Savage has built a diverse and well-respected inland marine transportation business with a strong presence in towing, bunkering and fleeting along the Gulf Coast. These operations complement Kirby’s inland business very well and will enable us to better service our customer’s towing and fleeting needs.
"Savage’s ship bunkering business in New Orleans is an ideal expansion of Kirby’s existing bunkering operations in Texas and Florida, and gives Kirby the ability to service bunker customers in this important Gulf Coast port."
Grzebinski added, "In 2020, the marine business is poised to deliver positive growth in revenue and earnings, and the addition of Savage will further strengthen our fleet and earnings power for the future."