Maritime Professional - Q1 2014 - page 3

Reprinted with Permission from the Q1 2014 edition of Maritime Professional
a booming Jones Act shipbuilder in recent years. Norwegian
holding company Aker took over the yard in 2005 and worked
a contract with Shell Oil for 12 product tankers. The yard was
hit hard during the financial crisis and with the help of state
and local taxpayers, Aker kept the operation alive by securing
financing for two spec-built ships. Fast forward three years,
and AKPS has booked contracts with SeaRiver Maritime and
Crowley Maritime for up to 14 new vessels, and the publicly-
traded stock is up over 2200% in the past 18 months.
On the topic of excellent public stock performance, it
is hard to miss the outstanding run at Kirby Corporation
(NYSE:KEX). In previous articles, we have followed the dra-
matic growth of Kirby both organically and via acquisition.
The company made six acquisitions since 2008 with a total
value of over $800 million, and it seems that their strategy and
integration efforts have proven successful. Figure 1 displays
the outsize performance of KEX stock, especially when com-
pared with the lagging offshore service and offshore drilling
indices over the past three years.
Trends to Watch
Unfortunately for many of us, the enormous returns of KEX
and AKPS are simply hindsight, but there are some trends de-
veloping that will drive investment and open new markets in
the coming years. Foremost is the opening of the Mexican
portion of the Gulf of Mexico to competitive investment and
production. Mexican President Enrique Pena Nieto spear-
headed a successful constitutional reform effort to open the
offshore region of that country, and foreign companies are
lined up to develop alliances and compete for exploration
and drilling rights. And as always, analysts and investors are
keeping an interested but wary watch on developments in sea-
based alternative energy in North America. Cape Wind, LLC
will be supplying the first offshore wind farm in the United
States, a 3.6 MW operation off the coast of Nantucket. Even
more nascent is an effort to support hydropower facility de-
velopment, as embodied in a proposed bill by US Senator Ron
Wyden of Oregon. Look for future editions of this article se-
ries to track ongoing developments in traditional and alterna-
tive energy finance.
Unfortunately for many of us,
the enormous returns of KEX and AKPS
are simply
hindsight, but there are some trends developing that will drive investment
and open new markets in the coming years.
Harry Ward
leads the transportation and logistics practice
at The McLean Group, a middle-market investment bank
based in the Washington, DC area. Mr. Ward has executive
management experience in the marine industry and focuses
on mergers and acquisitions for mid-sized companies. He is
a US Naval Academy graduate and earned an MBA at San
Diego State University.
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