Kirby Expects $10M A Year Savings After Acquisition

Kirby Corp., the nation's largest tank barge operator, expects to save at least $10 million per year due to its acquisition of Hollywood Marine Inc. Kirby agreed to buy the inland tank barge company in July for about $325 million. Closing of the deal is scheduled to occur this week. "Cost savings, through the consolidation of the corporate headquarters, the elimination of duplicate administrative and operating staffs and expenses, and improved operating efficiencies in the marine transportation division, are estimated to be at least $10 million per year," Kirby said in a statement. Company officials would not comment further on how many jobs would be cut and where those reductions would be made. Kirby officials said that a significant portion of the savings is expected to be realized in 2000, and substantially all of the savings are expected to be realized over the next six quarters. The company expects the acquisition to be accretive to its earnings per share in 2000. Officials said Kirby will finance the cash portion of the acquisition and the repayment of Hollywood's existing debt through a new $200 million bank credit facility along with its existing undrawn $100 million bank revolving credit agreement. Hollywood Marine owns 256 barges operating along the Gulf Intracoastal Waterway and the lower Mississippi River and had revenues of $168 million in 1998.