Barge operator Kirby hopes to sail high on K-Sea deal
* Kirby sees high single to low double digit gain to 2012 EPS
* Kirby backs Q1, 2011 EPS view
* K-Sea shares jump 29 pct
* Kirby shares touch three-year high
By Swetha Gopinath and Krishna N Das
BANGALORE, March 14 (Reuters) - Kirby Corp , which transports petrochemicals and refined petroleum products by tank barge, said its deal to buy smaller rival K-Sea Transportation Partners will add to its per-share earnings by the high single to low double digits in 2012.
Units of K-Sea leaped 29 percent to $8.35 -- above the bid price of $8.15 -- on Monday on the New York Stock Exchange.
Kirby shares, which backed off from their highest levels in nearly three years to be slightly down in morning trade, inched up a percent after the company forecast profit gains from the deal.
Houston-based Kirby, which also backed its first-quarter profit outlook of 56-61 cents a share, said it has been hit by bad weather so far in the current quarter.
Analysts were expecting Kirby to earn 58 cents a share for January-March and $3.24 for 2012, according to Thomson Reuters I/B/E/S.
"(In) February we incurred twice as many weather delays as we incurred last year," Kirby's Chief Executive Joe Pyne said on a conference call, adding that in March too the company saw a number of fog delays along the Gulf Coast.
He also said the deal to buy K-Sea comes at a time when recent market challenges like capacity oversupply and decline in demand are correcting themselves.
"We have followed K-Sea for a long time and we believe that this is a unique opportunity for Kirby," Pyne said.
He noted that U.S. fuel consumption, the primary driver of K-Sea's revenue, has improved from the lows seen in 2009 and is expected to grow during 2011 and 2012.
"Given Kirby's scale within the maritime industry, inland tank barge fleet and efficient operating platform, the integration of K-Sea should prove complementary to Kirby, while enhancing Kirby's liquid transportation business into the coastwise trade," Raymond James analyst Darren Horowitz said.
The deal, with total value of about $600 million, will be part financed by a loan of up to $540 million underwritten by Wells Fargo , Bank of America , and JP Morgan. (Reporting by Krishna N Das and Swetha Gopinath; additional reporting by Mayuresh Tungare; Editing by Jarshad Kakkrakandy)