BRISTOL, Conn. - Barnes Group Inc . (NYSE: NYSE:B), an international provider of highly engineered products and industrial technologies, has agreed to be acquired by affiliates of Apollo Global Management, Inc. (NYSE: NYSE:APO) in an all-cash transaction that values the company at about $3.6 billion.
Under the terms of the agreement, Barnes shareholders will receive $47.50 per share in cash. This purchase price is a 22% premium over the company's undisturbed closing share price on June 25, 2024, and a 28% premium over the 90-day volume weighted average price leading up to the same date.
Richard J. Hipple, Chairman of the Board of Directors at Barnes, stated that the deal with Apollo Funds offers immediate cash value to shareholders and supports the company's continued commitment to its customers in aerospace and industrial sectors. The board has unanimously endorsed the transaction, recommending shareholder approval.
Thomas J. Hook, President and CEO of Barnes, highlighted the company's recent strides in enhancing business performance and expressed confidence that Apollo's track record will help Barnes accelerate its transformation and growth.
Antoine Munfakh, Partner at Apollo, praised Barnes for its strong customer relationships and heritage in aerospace and industrial businesses. Apollo's investment is expected to further the growth of Barnes's businesses.
The transaction is anticipated to close before the end of Q1 2025, subject to customary closing conditions, including Barnes shareholder approval and regulatory clearances. Following the completion, Barnes will be delisted from the New York Stock Exchange and will continue operations as a privately held company under the same name and brand.
In relation to the transaction, Barnes will not hold its Q3 2024 earnings call and has suspended its financial guidance for the full year 2024. The company's third-quarter earnings will be released on October 25, 2024, before the market opens.
Goldman Sachs & Co. LLC and Jefferies LLC are acting as financial advisors, while Wachtell, Lipton, Rosen & Katz is providing legal counsel to Barnes. Apollo Funds is advised by Latham & Watkins LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP.
The proposed transaction involving Barnes Group will be detailed in materials filed with the U.S. Securities and Exchange Commission, including a proxy statement. Shareholders are urged to read these materials once available for more information.
This article is based on a press release statement.
In other recent news, Barnes Group Inc. is in discussion with Apollo Global Management for a potential acquisition, with Oppenheimer maintaining an Outperform rating and $48.00 price target for Barnes Group. Oppenheimer suggests a purchase price of $55 per share based on projected earnings before interest, taxes, depreciation, and amortization (EBITDA) for Barnes Group's aerospace and industrial segments. The company also reported a 13% increase in revenue, reaching $382 million, and a 14% rise in adjusted EBITDA to $76 million in the second quarter of 2024, despite a decrease in earnings per share.
The aerospace division of Barnes Group saw a significant surge with sales increasing by 79%, while the industrial segment experienced a 24% drop in sales due to divestitures. The company has adjusted its full-year sales growth guidance to 10-12%, with organic sales growth expected at 4-6%.
In a recent executive shift, Barnes Group announced the appointment of Troy W. Ingianni as the new Principal Accounting Officer, succeeding Marian Acker who is transitioning to a Senior Advisor role. Ingianni's compensation includes a base salary of $270,000, a target annual incentive award, and a one-time equity grant of restricted stock units. These are among the recent developments that continue to shape Barnes Group's business trajectory.
InvestingPro Insights
The proposed acquisition of Barnes Group Inc. (NYSE: B) by Apollo Global Management affiliates at $47.50 per share aligns closely with recent market trends and financial metrics. According to InvestingPro data, Barnes Group's stock was trading near its 52-week high, with a price at 99.89% of its peak. This positioning likely contributed to the attractive 22% premium offered in the deal.
InvestingPro Tips highlight that Barnes Group has maintained dividend payments for 54 consecutive years, showcasing its long-term financial stability. This consistent dividend history may have been a factor in Apollo's interest, as it indicates a steady cash flow generation capability.
The company's recent financial performance also supports the acquisition rationale. Barnes Group reported a revenue of $1,589.4 million in the last twelve months as of Q2 2024, with a robust revenue growth of 22.02% over the same period. Additionally, the company's EBITDA growth stood at an impressive 58.11%, signaling improving operational efficiency.
It's worth noting that while Barnes Group wasn't profitable over the last twelve months, with a negative P/E ratio of -38.9, InvestingPro Tips suggest that analysts predict the company will be profitable this year. This expectation of a financial turnaround might have been a key factor in Apollo's decision to acquire Barnes at this juncture.
For investors seeking more comprehensive insights, InvestingPro offers 11 additional tips for Barnes Group, providing a deeper understanding of the company's financial health and market position.
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