Barnes Group Inc. Striking $175 Million Deal

Industrial manufacturer Barnes Group Inc B has entered into a definitive agreement to sell its Associated Spring and Hänggi businesses to One Equity Partners.

The transaction is valued at $175 million, including a $15 million seller promissory note due in 24 months.

Debt Reduction Strategy

The company expects net cash proceeds of $150 million, which will be used to reduce debt incurred from the acquisition of MB Aerospace in August 2023.

Barnes is committed to achieving a Net Debt to EBITDA ratio of 3.0x or lower by the end of 2024.

The company also reaffirmed its long-term leverage goal of 2.5x by 2025.

CEO’s Perspective

“Over the past year, we have been executing a comprehensive business transformation strategy based on three key pillars — Execute Core Business; Scale Aerospace; and Integrate, Consolidate & Rationalize Industrial — to generate improved growth, profitability, and cash flow at Barnes,” said President and CEO Thomas J. Hook.

“Additionally, this transaction allows us to pay down debt, enabling lower interest expense and meaningful tax benefits.”

Business Details

Associated Spring and Hänggi are known for engineered spring and precision metal component manufacturing, progressive stamping, micro-stamping, and fine blanking. 

Combined, the businesses raked in about $200 million in revenues over the last twelve months with over 800 employees worldwide and operations in the U.S., Mexico, Brazil, Switzerland and Singapore.

Impending Earnings Update

Barnes will provide additional details on the company’s fourth quarter and 2023 earnings call on February 16, 2024.

Stock Movement

Price Action: B shares traded higher by 1.10% at $30.74 on Thursday.