Stewart & Stevenson To Be Sold
By Mike Brezonick13 June 2017
Kirby Corp., one of the United States’ largest domestic tank barge operators and a distributor and service provider of diesel engines and reduction gear used in marine and power generation applications, said it has signed a definitive agreement to acquire substantially all of the assets and businesses of Stewart & Stevenson LLC, a subsidiary of the Houston, Texas-based Parman Capital Group. Sale price is approximately $710 million before post-closing adjustments and transaction fees.
The purchase will be funded equally through Kirby’s revolving credit facility and Kirby common stock valued at approximately $355 million, subject to certain closing adjustments. The closing of the acquisition is expected to occur in the third quarter and is subject to customary closing conditions.
“The combination of Stewart & Stevenson with Kirby’s existing distribution and services business has the potential to unlock significant strategic value, dampen overall volatility in the business, and create a larger organization at an opportune time, as the industry continues to recover from a deep downturn,” said Joseph H. Pyne, executive chairman of Houston-based Kirby Corp. “We are pleased to welcome the management and employees of a globally-recognized company with 115 years of history. We welcome the support of Parman Capital Group as a major shareholder of Kirby Corp.”
Stewart & Stevenson, based in Houston, Texas, is a global manufacturer and distributor of products and services for the oil and gas, marine, construction, power generation, transportation, mining and agricultural industries. Founded in 1902, Stewart & Stevenson serves domestic and global markets with equipment, rental solutions, parts, and service through a strategic network of sales and service centers in domestic and international locations.
“The acquisition of Stewart & Stevenson significantly expands the geographic footprint and capabilities of our distribution and services business,” said David Grzebinski, Kirby’s president and chief executive officer. “This transaction creates one of the largest distribution networks in the country with the engineering and technological capacity to successfully address the complex requirements of a large customer base in a competitive national and global environment.
“In this period of accelerating demand in the pressure pumping and industrial sectors of the economy, Stewart & Stevenson’s leadership in these sectors and its longstanding, close relationships with the world’s major industrial companies provide an excellent opportunity for us to expand our participation in the national and international arenas. We expect this to accelerate diversification of our combined product lines, boost facility utilization and improve productivity.”
Kirby Corp. transports bulk liquid products throughout the Mississippi River System, on the Gulf Intracoastal Waterway, coastwise along all three United States coasts and in Alaska and Hawaii. Kirby transports petrochemicals, black oil, refined petroleum products and agricultural chemicals by tank barge, as well as offshore dry-bulk barges and tugboats used in transportation of dry-bulk cargos in the United States coastal trade.
Through its Marine Systems business, Kirby provides aftermarket service for medium-speed and high-speed marine diesel engines and marine reduction gears. It is an authorized dealer of EMD medium-speed engines, as well as high-speed Caterpillar, Cummins, John Deere and Detroit Diesel marine engines. The company also supports Rexnord, Lufkin, Reintjes and ZF Marine marine drives and transmissions.
On the power generation and oilfield side, Kirby Engine Systems supplies diesel engines, generators, replacement parts and service for critical standby diesel generators, along with diesel engines, transmissions and pumps, and new and remanufactures oilfield service equipment, including pressure pumping units, for land-based oilfield service and oil and gas operator and producer markets.