Houston-based tank barge operator Kirby Corp. signed an agreement to acquire Targa Resources Corp’s inland marine tank barge business for about $69.3 million, the companies said Thursday.
Targa is a midstream energy company that also is based out of Houston.
Kirby said the transaction is expected to close near the end of the second quarter and that it will finance the purchase through additional borrowings.
Targa said it intends to use the sale proceeds to fund a portion of its capital growth program under way.
Targa’s inland marine tank barge fleet consists of 16 pressure barges with an aggregate capacity of about 258,000 barrels, many of which are under long-term multiyear contracts.
“With the ongoing petrochemical build-out progressing along the U.S. Gulf Coast, these incremental barges will give Kirby additional capacity to meet our customers’ growing needs for the movement of pressurized cargos such as liquefied petroleum gas and certain ethylene plant coproducts,” Kirby President and CEO David Grzebinski said.
“We expect to incur some costs in the near term; however, these barges will be approximately $0.02 per share accretive in 2018," he added.
The news comes just a week after Kirby posted strong first-quarter results, with net earnings of $32.67 million on revenues of $741.69 million, up 18 percent and 51 percent year-over-year, respectively.