HOUSTON — Kirby Corporation is acquiring Stewart & Stevenson LLC, a supplier of engines and transmissions to the motorcoach industry, for approximately $710 million.
Houston-based Kirby Corporation is the nation’s largest domestic tank barge operator transporting petrochemicals, black oil, refined petroleum products and agricultural chemicals.
Through its diesel engine services segment, Kirby provides after-market service for medium-speed and high-speed diesel engines and reduction gears used in marine and power generation applications and also distributes and services diesel engines, transmissions and pumps.
Stewart & Stevenson, also based in Houston, is a leading global manufacturer and distributor of products and services for the oil and gas, marine, construction, power generation, transportation, mining and agricultural industries.
It distributes Detroit Diesel engines and Allison transmissions to the on-highway transportation industry.
“The acquisition of Stewart & Stevenson significantly expands the geographic footprint and capabilities of our distribution and services business,” said Kirby President and CEO David Grzebinski. “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,” Grzebinski said.
“We expect this to accelerate diversification of our combined product lines, boost facility utilization and improve productivity.”
The acquisition will be funded equally through Kirby’s revolving credit facility and its 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, including regulatory approvals under the Hart-Scott-Rodino Act.