Kirby Corp has agreed to purchase the inland tank barge fleet and bunkering services of Savage Inland Marine for US$278M million in cash and the assumption of leases
This acquisition comes as Kirby reported a decrease in revenues in 2019 of US$2.84Bn, compared with US$2.97Bn for 2018, due to a slowdown in oilfield and pressure pumping-related business.
Kirby’s oilfield services division has struggled, but its inland waterway and coastal transportation businesses have encountered favourable market conditions and rising fleet utilisation.
With this in mind, Kirby has moved to increase its fleet for future improvements in inland waterway transportation demand.
In its US$278M purchase, Kirby will take over operation of Savage’s fleet of 90 inland tank barges, with total capacity of around 2.5M barrels, and 46 inland towboats.
Savage primarily transports petrochemicals, refined products and crude oil on the Mississippi River, its tributaries, and the Gulf Intracoastal Waterway. It also operates a ship bunkering business and barge fleeting services along the US Gulf Coast.
Kirby’s president and chief executive David Grzebinski 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.”
“Savage has built a diverse and well-respected inland marine transportation business with a strong presence in towing, bunkering and fleeting along the US Gulf Coast.
“These operations complement Kirby’s inland business and will enable us to better service our customer’s towing and fleeting needs,” he continued. “Savage’s ship bunkering business in New Orleans is an ideal expansion of Kirby’s existing bunkering operations in Texas and Florida.”
Kirby reported 2019 net earnings of US$174M, compared with US$171M in 2018, excluding one-time items in both years. Its revenues in Q4 2019 were US$656M, compared with US$722M in Q4 2018.
Kirby’s net earnings in Q4 2019 were US$2.8M, compared with a net loss of US$24M in the same period in 2018. Excluding one-time charges in both quarters, Q4 2019 net earnings were US$35M compared with US$45M for Q4 2018.