Merger Agreement Between K-Sea and Kirby Corporation

Source: www.gulfoilandgas.com 3/13/2011, Location: North America

K-Sea Transportation Partners L.P. (K-Sea) announced that they have entered into a definitive merger agreement with Kirby Corporation (Kirby). Pursuant to the terms of the agreement, K-Sea will become a wholly-owned subsidiary of Kirby. The K-Sea management team will continue to run the day-to-day operations of the coastwise tank barge business after completion of the transaction.

The merger agreement was unanimously approved by K-Sea's Board of Directors, acting upon the unanimous recommendation of its conflicts committee. Under the terms of the agreement, K-Sea's common unitholders will have the right to elect to receive either (a) $8.15 in cash; or (b) $4.075 in cash plus 0.0734 of a share of Kirby's common stock for each common unit. K-Sea's preferred unitholders will receive $4.075 in cash and 0.0734 of a share of Kirby's common stock for each preferred unit. K-Sea's general partner will receive $8.15 in cash for each general partner unit and $18 million in cash for K-Sea's incentive distribution rights.

The transaction price of $8.15 per K-Sea common unit represents a 26% premium to the closing price on March 11th and a 38% premium to the 30-day average closing price. The equity in the transaction is valued at approximately $335.3 million based on approximately 38.9 million units outstanding, and is expected to close in the second or third calendar quarter of 2011.

President and CEO, Timothy J. Casey said "Kirby's record of long-term growth and delivering shareholder value is among the best in the maritime industry, not only in the U.S. but also arguably throughout the world. The company is admired and respected by customers and competitors alike. K-Sea's management is excited to partner with the Kirby organization, and is delighted our unitholders have the opportunity to elect to become shareholders of Kirby. We look forward to working with Kirby's management and seeing the business opportunities that the combination will likely provide K-Sea."

In connection with this transaction, KA First Reserve, LLC and certain affiliates of Jeffries Capital Partners have entered into support agreements pursuant to which they have agreed to vote their K-Sea units in favor of the merger. These entities currently hold all of K-Sea's outstanding preferred units and approximately 59.9% of its outstanding common units (including the outstanding preferred units on an as-converted basis), which is a sufficient number of units to approve the merger.

UBS Investment Bank acted as financial advisor to K-Sea and Stifel, Nicolaus & Company, Incorporated acted as financial advisor to K-Sea's Conflicts Committee. Latham & Watkins LLP acted as legal counsel to K-Sea and DLA Piper acted as legal counsel to K-Sea's Conflicts Committee.


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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