Kirby announces preliminary election results by K-Sea Transportation unitholders regarding preference for cash, Kirby common stock following merger scheduled to close first week of July

Alison Gallant

HOUSTON , June 29, 2011 (press release) – Kirby Corporation ("Kirby") (NYSE:KEX - News) announced today the preliminary results of elections by common unitholders of K-Sea Transportation Partners L.P. ("K-Sea") (NYSE:KSP - News) to receive cash or a combination of cash and Kirby common stock in the previously announced merger between K-Sea and a subsidiary of Kirby that is scheduled to close in the first week of July.  K-Sea will survive the merger as a wholly owned subsidiary of Kirby.

There are a total of 19,160,394 K-Sea common units outstanding and another 388,939 phantom units issued under K-Sea's long-term incentive plan that are treated as common units for purposes of the merger, for a total of 19,549,333 common units.  The holders of 9,482,717 K-Sea common units elected to receive merger consideration consisting of $8.15 in cash for each common unit.  The holders of 7,242,915 K-Sea common units elected to receive consideration consisting of $4.075 in cash and 0.0734 of a share of Kirby common stock for each common unit.  The holders of 2,823,701 K-Sea common units made no election by the deadline of 5:00 p.m., New York time, on June 28, 2011, and will therefore receive consideration consisting of $8.15 in cash for each common unit.  

In addition, the holder of 19,178,120 K-Sea preferred units will receive merger consideration consisting of $4.075 in cash and 0.0734 of a share of Kirby common stock for each unit, the holder of 202,447 general partner units will receive $8.15 in cash for each unit and the holder of K-Sea's incentive distribution rights will receive $18 million in cash.

Based on elections received, the total merger consideration to K-Sea equity holders (excluding the refinancing of K-Sea debt and the fees associated with the transaction) will consist of approximately $228,000,000 in cash and approximately 1,939,000 shares of Kirby common stock.  Those totals are preliminary estimates and remain subject to verification of elections and the payment of cash in lieu of fractional shares.

Kirby Corporation, based in Houston, Texas, operates inland tank barges and towing vessels, transporting petrochemicals, black oil products, refined petroleum products and agricultural chemicals throughout the United States inland waterway system.  Through the 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 distributes and services high-speed diesel engines, transmissions, including hydraulic fracturing equipment, for land-based pressure pumping and oilfield service markets.

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