Kirby Corporation Signs Agreement To Acquire K-Sea Transportation Partners L.P.

Houston, Texas (March 13, 2011) – Kirby Corporation (“Kirby”) (NYSE:KEX) announced today that it has entered into an agreement with K-Sea Transportation Partners L.P. (“K-Sea”) (NYSE:KSP), an operator of tank barges and tugboats participating in the coastwise transportation primarily of refined petroleum products in the United States, pursuant to which a subsidiary of Kirby will merge with K-Sea, with K-Sea surviving the merger as a wholly owned subsidiary of Kirby. The total value of the transaction is approximately $600 million (before post-closing adjustments and fees) and will consist of cash, Kirby common stock and the refinancing of K-Sea debt.

The transaction will be financed through a combination of available cash, borrowing under Kirby’s revolving credit facility, a new bank term loan of up to $540 million and the issuance of Kirby common stock. The closing of the transaction is expected to occur in June or July 2011 and is subject to certain conditions, including approval by K-Sea’s unitholders and the expiration of the required waiting period under the Hart-Scott-Rodino Act. The holders of a majority of the outstanding K-Sea units, which is a sufficient number of units to approve the merger, have entered into support agreements with Kirby pursuant to which they have agreed to vote their units in favor of the merger.

Under the terms of the agreement, the total value of the transaction is approximately $600 million, consisting of $335 million for K-Sea’s equity and the refinancing of $265 million of K-Sea debt. K-Sea’s common and preferred unitholders will receive $8.15 per unit in consideration in the form of cash and Kirby common stock. K-Sea’s common unitholders will have the election to receive for each common unit either $8.15 in cash or $4.075 in cash and 0.0734 of a share of Kirby common stock. K-Sea’s preferred unitholders will receive for each preferred unit $4.075 in cash and 0.0734 of a share of Kirby common stock. K-Sea’s general partner will receive $8.15 in cash for each general partner unit and $18 million in cash for its incentive distribution rights.

K-Sea’s fleet, comprised of 58 tank barges with a capacity of 3.8 million barrels and 63 tugboats, operates along the East Coast, West Coast and Gulf Coast of the United States, as well as in Alaska and Hawaii. K-Sea’s tank barge fleet, 54 of which are doubled hulled, has an average age of approximately nine years and is one of the youngest fleets in the coastwise trade. K-Sea’s customers include major oil companies and refiners, many of which are current Kirby customers for inland tank barge services. Headquartered in East Brunswick, New Jersey, K-Sea has major operating facilities in New York, Philadelphia, Norfolk, Seattle and Honolulu.

Kirby Corporation press release