Kirby Corporation announced its Board of Directors has concluded the Company’s review of strategic alternatives for its Distribution and Services business, which was initiated in early 2022.
The Kirby Board of Directors (the “Board”), with the support of its independent financial and legal advisors, reviewed a range of alternatives, including a sale or spin-off of the Company’s Distribution and Services business, and held discussions with a number of potential strategic and financial counterparties. Following this process, the Board concluded that, under current financial market conditions, the best path for Kirby is to continue to execute its strategic plan for both its Marine Transportation and Distribution and Services businesses. The Board and management team remain open to reviewing any and all opportunities that may maximize value for shareholders.
“Following a thorough review of strategic alternatives, the Kirby Board determined that the best way to enhance shareholder value is to continue to execute on the strategic plan for both the Marine Transportation and Distribution and Services businesses at this time,” said Joseph H. Pyne, Kirby’s Chairman of the Board. “The M&A market continues to be constrained by macroeconomic headwinds, including a challenging financing environment. The Board remains committed to maximizing value and will continue to evaluate all opportunities to do so, consistent with its fiduciary duty to shareholders.”
As the industry’s most trusted marine transportation and equipment distribution and services provider, Kirby has deep operational expertise and unique capabilities that position both of its businesses to deliver long-term growth and enhanced performance. The Company’s financial strength is evidenced by its investment-grade balance sheet and strong cash flow generation. Looking ahead, Kirby expects that favorable conditions for inland marine transportation and oil and gas markets will support continued growth in demand for the Company’s products and services. For Kirby’s Distribution and Services segment, the Company expects demand for its new products that have been developed as part of its electrification growth strategy, especially for its environmentally friendly pressure pumping and e-frac power generation equipment, to remain strong with growing backlog of new orders and increased deliveries of new equipment into 2023. Kirby continues to expect its businesses to deliver improved financial results throughout 2023 as it maintains a relentless focus on cost and capital management, while capitalizing on growth opportunities and continuing to ensure safe, efficient, and reliable operations.
David Grzebinski, Kirby’s President and Chief Executive Officer, commented, “The Board and management team are confident in Kirby’s prospects for continued profitable growth and value creation, as underscored by our strong financial results and operating performance in 2022. In Distribution and Services, our markets remained strong throughout 2022 and contributed to Kirby’s meaningful year-over-year growth in revenue and operating margin. We are encouraged by the bright prospects of the Company’s two segments and look forward to continuing to operate these businesses from a position of strength. As always, we remain open-minded and eager to consider strategic options to maximize value creation.”
Advisors
Morgan Stanley & Co. LLC is serving as Kirby’s strategic financial advisor, and Cravath, Swaine & Moore LLP is serving as legal counsel.
