The Barnes Group, a prominent industrial company, has reached an agreement to be acquired and taken private by funds managed by affiliates of Apollo Global Management, with a transaction value estimated at approximately $3.6 billion. As part of the acquisition, Barnes shareholders are set to receive $47.50 per share in cash.
Once the deal is finalized, the company will no longer be traded on the New York Stock Exchange but will continue its operations under the Barnes Group name. In response to this news, Barnes shares saw an increase of 2.7% in premarket activity, reflecting investor confidence in the deal. Richard Hipple, Chairman of Barnes, expressed, "The board and management team carefully reviewed a range of potential opportunities and determined that this transaction with Apollo Funds maximizes value for our shareholders and is in the best interest of all stakeholders." Barnes has established itself as a leader in developing advanced processes, automation solutions, and applied technologies spanning various industries, including medical and personal care, mobility, packaging, and aerospace. For the deal to materialize, it must undergo regulatory clearance and receive approval from Barnes’ shareholders.
It is anticipated to be completed before the conclusion of the first quarter of 2025. Thomas Hook, the Chief Executive of Barnes, stated, "Under Apollo Funds ownership, we aim to accelerate our transformation, enhance our capabilities, broaden our product offerings, and create new opportunities for growth and innovation." He expressed enthusiasm about partnering with the Apollo team to continue executing their transformation strategy. However, due to the acquisition, Barnes has suspended its full-year 2024 guidance and will not hold a conference call regarding its third-quarter results, which are due to be released on October 25th.
Earlier in July, the company had projected adjusted earnings within the range of $1.55 to $1.75 per share for the given fiscal year, alongside expectations of organic sales growth between 4% and 6%. Antoine Munfakh, a partner at Apollo, commented on the potential for growth, stating, "We see opportunities to further invest in and grow Barnes' businesses, which are positioned to benefit from long-term aerospace demand trends, as well as the need for high performance components and solutions for a range of end-markets." He acknowledged the significant progress made by the Barnes team through its transformation plan and expressed confidence that this plan can be expedited in a private company framework. With share price standing at $46.45 and a change of +1.19, translating to a percentage change of +2.63, analysts and stakeholders alike are watching closely as this acquisition unfolds, looking to see how it influences both the company's future and the broader industry landscape..