Activist investor JCP Investment Management has built a position in Kirby Corp., Houston, and has been pushing for a strategic review of the barge operator, including breakup or sale of the company, according to Bloomberg, citing people familiar with the matter.
Houston-based JCP, which owns more than a 1% in Kirby, has been privately engaging the company for months about forming a strategic review committee that would include new, independent directors, the sources said, asking not to be identified because the matter is private.
The investment firm has called for Kirby to explore a separation of its inland marine and distribution and services businesses, which JCP argues have few synergies, the sources said. Failing that, JCP, which is run by James Pappas, has called for an outright sale of the company, they added.
A representative for JCP declined to comment, while a representative for Kirby was not immediately available for comment.
Kirby’s shares rose 3.8% in trading on Aug. 25 as of 9:35 a.m. in New York, giving the company a market value of about $4.2 billion. The stock has gained about 22% in the past year through the Aug. 24 close.
A tank barge operator that transports bulk liquid products throughout the US, Kirby is also a service provider and distributor of diesel engines, transmission parts, and other industrial equipment, according to its website.
David Grzebinski, Kirby’s CEO, said on an earnings call in July that second-quarter profits were buoyed by tight market conditions due to a limited supply of barges and increasing oilfield activity.
Despite those tailwinds, JCP has raised concerns about the company’s long-term underperformance relative to peers and the broader S&P 500 Index in meetings with Kirby’s leadership, the sources said. It has also raised concerns about its stagnant earnings and its historically large capital expenditures.
It has argued that several strategic and financial buyers would be willing to pay a premium for Kirby given its depressed share price and improving markets.
JCP has pushed for changes at several companies in the past, including at Core-Mark Holding Co. last year before it was sold to Performance Food Group Co.