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Dale-100x140 Kirby’s buying spree continues

December 11, 2012

Kirby Corp. may not be satisfied until it scoops up every U.S.-flag coastal tank barge transporter. That’s the message I got with Kirby’s recently announced deal to buy Penn Maritime Inc. for $295 million. The deal tops off two years of acquisitions totaling over $1 billion that makes the Houston-based domestic tank barge giant an even more formidable coastwise operator.

And it's likely that Kirby is not done yet, with other operators on its radar.

The Penn purchase includes 18 double-hull heated ocean tank barges and 16 tugs. Twelve of Penn’s tug-barge units are modern ATBs. Stamford, Conn.-based Penn is the largest coastal transporter of liquid asphalt, fuel oil, and feedstocks in the U.S. The Penn purchase comes on heels of the September deal where Kirby agreed to the $116 million acquisition of Allied Transportation Co. with its fleet of 10 coastwise tank barges, three offshore dry-bulk barges and seven tugs.

Last year, Kirby bought K-Sea Transportation Partners for $600 million and got 58 coastal tank barges and 63 tugs, and also acquired Seaboats Inc.’s three coastwise tug-and-barge units for $42.3 million.

The addition of Penn increases Kirby’s coastwise capacity by 39 percent to 6.8 million bbls. This gives them about a one-third share of the offshore/coastal market — similar to its share of the inland barge business, John Larkin, an analyst with Stifel Nicolaus, said in a note. So what’s next for Kirby? Well, the next largest coastal player is privately held Vane Brothers, headquartered in Baltimore. Vane has a fleet of 30 tugs and 45 barges, and two 140,000-bbl. ATB units.

Kirby still has $185 million of credit left, but “there most likely will not be any major acquisitions in the near-term, and if there are, they will likely be smaller” than the Penn deal, Larkin noted. Kirby may take a short-term breather, but in the long term, I expect Kirby to cut more deals and continue to consolidate the coastal petroleum transport market.

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