Activist investor JCP Investment Management, LLC has built a position in Kirby Corporation (NYSE:KEX) and has been pushing for a strategic review of the barge operator, including breakup or sale of the company, according to people familiar with the matter. 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 people 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 people 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 wasn't immediately available for comment. Kirby's shares rose 3.8% in trading on August 25, 2022 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 Wednesday's 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 chief executive officer, 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 people 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.