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October 7, 2024

Updated: Barnes Group to be acquired by private equity firm in $3.6B deal

COSTAR Barnes Group's Main Street headquarters in Bristol.
By Harriet Jones

One of the most recognizable names in Connecticut manufacturing, Barnes Group, is to be acquired by private equity firm Apollo Global Management in a $3.6 billion deal.

Barnes shareholders will receive $47.50 per share in cash, representing a premium of about 5% over Barnes’ last closing share price. 

The deal is expected to close by the end of the first quarter of 2025, subject to shareholder approval. The company says it will seek a shareholder meeting as soon as possible. Barnes will be delisted and become a privately held company.

There is a significant termination fee associated with the deal. Barnes has agreed to pay an $85 million termination fee if it breaks the agreement by accepting another takeover offer. Apollo will pay a $168.5 million fee if it fails to close the acquisition in a timely manner, according to a filing with the U.S. Securities and Exchange Commission.

Richard J. Hipple, chairman of Barnes’ board of directors described the deal as providing “immediate and certain” cash value to shareholders.

“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,” he said in a statement.

“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,” said Antoine Munfakh, Partner at Apollo. 

Barnes Group’s history stretches back to 1857 in Bristol. Its predecessor company, Associated Spring, was taken public in 1946. It has some 5,700 employees across its global operations. 

The company makes precision components for aerospace and a range of other industries.

There’s no clarity yet on how the sale may affect Barnes’ headquarters in Bristol, its leadership structure or its workforce.

“Those are details that will be worked out with Apollo as we progress towards closing,” said company spokesman William E. Pitts. “I don’t want to speculate on what Apollo may or may not do.”

Pitts added that the deal came about as the result of a portfolio shakeup undertaken by Barnes, initiated by CEO Thomas J. Hook when he took over in July 2022.

Under that strategy, the company has focused more closely on its aerospace segment. That included the largest acquisition in Barnes’ history, when it bought UK-based MB Aerospace in a $740 million deal last year.

In tandem with the aerospace expansion, Hook has also been consolidating and shrinking the industrial portion of Barnes’ business, including the sale in April of this year of its legacy Associated Spring segment to New York-based One Equity Partners.

“It’s progress along that journey that really piqued interest for outside companies like Apollo in Barnes,” Pitts said.
 

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