Industrial goods maker Barnes Group (B) is said to be in discussions to be bought by private equity firm Apollo Global Management LLC (APO) for roughly $2 billion. Barnes shares jumped over 8% on the news in after-hours trading yesterday and are trending higher in pre-market trading at the time of writing. According to a Reuters report, Barnes is negotiating an exclusive deal with Apollo while there are other interested bidders too for the company.
Initial talks suggest that Barnes could be valued at more than $45 a share in the deal with Apollo. This implies a premium of over 12.3% on the closing price on October 3, before the news of the deal broke. Year-to-date, Barnes shares have gained 24.3% and touched a 52-week high of $45.24 in July 2024. The talks are not definitive, but a deal could be signed in the coming weeks. Apollo Global is known for making strategic investments in industrial companies with solid future prospects.
Here’s More About the Barnes Group
Barnes specializes in making component parts for different industry verticals including aerospace, healthcare, packaging, consumer, and electronics. It is renowned for manufacturing aerospace parts for commercial and military turbine engines. For the second quarter ending June 30, 2024, Barnes reported adjusted earnings per share of $0.37 on revenue of $382.23 million, both of which fell short of analysts’ expectations.
Importantly, Barnes is in pursuit of transforming into an aerospace-focused company, with the Aerospace segment contributing roughly 57% of total revenues in Q2. For the full-year Fiscal 2024, the company forecasts sales growth of 10% to 12% and organic sales growth between 4% and 6%.
Barnes is also the target of activist investor Irenic Capital, which has been pushing for a board reshuffle and strategic review of the company since 2022. Irenic Capital’s co-founder Adam Katz has successfully found a board seat in Barnes after enough struggle.
Is Barnes a Buy, Hold, or Sell?
On TipRanks, Barnes stock has a Moderate Buy consensus rating based on two Buys and one Hold recommendation. The average Barnes Group price target of $46 implies 14.8% upside potential from current levels.
