Genesis Energy has added 18 vessels to its list of assets. The partnership announced that it has inked an agreement to acquire the downstream transportation business of Hornbeck Offshore Transportation , which is essentially composed of those vessels. The price is roughly $230 million.
For its money, Genesis Energy will be buying nine barges and an equal number of tugboats. All are used to ship crude oil and refined products, and service refineries and storage terminals on the Gulf Coast and Eastern Seaboard, as well as on the Great Lakes and the Caribbean Sea.
At the moment, the company's inland barge operations are serviced by 50 barges and 23 push/tow boats.
The acquisition is subject to approval from the relevant regulatory bodies and is expected to close by the end of Q3. Genesis Energy said it will fund the transaction from its $1 billion revolving credit facility.
Once that occurs, said the partnership, it and Hornbeck "expect to enter into transition service agreements to facilitate a smooth transition of operations and uninterrupted services for both employees and customers."
The company said it anticipated that the new assets would be "immediately accretive" to its distributable cash flow per unit.
Copyright © 2009 The Motley Fool, LLC. All rights reserved.