US-based tank barge operator Kirby Corporation has agreed to acquire a majority of the assets and businesses of Stewart & Stevenson for about $710m.
The acquisition amount could go up after totaling the post-closing adjustments and transaction fees.
Stewart & Stevenson is a subsidiary of Parman Capital Group based in Houston, Texas, and is a global manufacturer and distributor of products and services for the oil and gas, power generation, mining and other industries.
According to Kirby's president and CEO David Grzebinski, the acquisition would considerably expand the company’s geographic presence and capabilities in distribution and services.
Grzebinski added: “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.”
Established in 1902, Stewart & Stevenson caters to the domestic and global markets with equipment, rental solutions, parts, and service that are delivered via a strategic network of sales and service centers in the US and in other countries.
Kirby on the other hand transports bulk liquid products on the Gulf Intracoastal Waterway, across the Mississippi River System, along all three US coasts, and in Hawaii and Alaska. By tank barge, it transports petrochemicals, refined petroleum products, black oil and agricultural chemicals.
Kirby executive chairman Joseph H. Pyne said: "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.
Kirby’s transaction with Stewart & Stevenson is likely to be closed in the third quarter. It is subject to regulatory approvals under the Hart-Scott-Rodino Act among other customary closing conditions.