- MB Aerospace is a Leading Provider of Precision Aero-Engine
Components and Component Repairs for Commercial and Military
Aircraft Engines
- Unique and Highly Complementary Footprint and Technical
Capabilities Serving Major Engine OEM, Tier 1 Suppliers, and
Operator Customers Globally
- Significantly Strengthens and Expands Barnes Aerospace’s Global
Original Equipment Manufacturing Offering and Aftermarket Repair
Capabilities
- Anticipates Revenue Growth, Adjusted Operating Margin, and
Adjusted EPS Accretion in Full Year 2024
- Strong pro forma free cash flow enables rapid deleveraging,
with net debt to Consolidated EBITDA expected below 3.0x within 12
months and 2.5x within 24 months following closing
Barnes Group Inc. (NYSE: B) today announced that it has entered
into a definitive agreement to acquire MB Aerospace (“MB”). MB
Aerospace is a leading provider of precision aero-engine component
manufacturing and repair services serving major aerospace and
defense engine OEMs, Tier 1 suppliers, and MRO providers for an
enterprise value of approximately $740 million. The transaction is
expected to close in the fourth quarter of 2023, subject to the
receipt of regulatory approvals and the satisfaction of other
customary closing conditions.
MB Aerospace maintains its corporate headquarters in Motherwell,
U.K. with an additional 10 facilities and approximately 1,450
employees across the U.S., U.K., Poland, and Taiwan. MB’s core
capabilities include the manufacture of high-value fabricated
assemblies and complex machined components, component repair, and
vertically integrated special processes. The business supplies over
100 aero-engine platforms, with exposure to leading A&D
industry customers including Pratt & Whitney, Rolls-Royce, and
General Electric.
MB Aerospace is projected to generate approximately $330 million
of revenue and $65 million of EBITDA in calendar year 2023. Barnes
anticipates that the effective purchase price multiple will be
approximately 11.4x 2023 EBITDA and 8.9x inclusive of pro forma
estimated run rate cost synergies. Upon closing of the transaction,
MB Aerospace will become part of Barnes Aerospace.
Barnes expects to finance the transaction with cash on hand and
additional acquisition financing. Upon closing, Barnes estimates
net leverage to be between 3.7x and 3.9x Consolidated EBITDA, with
a plan to reduce net leverage to below 3.0x within 12 months and
2.5x within 24 months following closing.
“The acquisition of MB Aerospace, the largest in Barnes’
history, is a transformational opportunity that is a significant
catalyst for our already world class aerospace business. MB is an
exceptional strategic fit for us with highly complementary program
focus, global operations, technical capabilities, and product
offerings. Like Barnes Aerospace, MB possesses a history and
culture of operational and technical excellence through a skilled
workforce, and global footprint that will help us drive
productivity across the combined entity,” said Thomas J. Hook,
President and Chief Executive Officer of Barnes. “With manageable
leverage, the realization of approximately $18 million in
identified annual run-rate cost synergies, disciplined cash
management, and a focus on core business execution, we anticipate
solid returns on invested capital for this transaction. Coupled
with Barnes’ progressing multi-phase transformation initiative, we
expect to deliver enhanced shareholder value,” added Hook.
“This acquisition significantly expands our ability to support
A&D customers throughout the product lifecycle, from new
production development & manufacturing to OEM-approved repair
solutions for critical structural and rotating aero-engine
components,” said Ian Reason, Senior Vice President, Barnes and
President, Barnes Aerospace. “The strategic combination of Barnes
Aerospace and MB Aerospace will further enhance our ability to
deliver value-add solutions across the aero-engine value chain,
deepen and broaden our customer relationships, add to our defense
industry exposure, and provide a healthy balance across aerospace
end markets.”
Advisors
Wachtell, Lipton, Rosen & Katz acted as legal counsel and
BofA Securities acted as financial advisor to Barnes. BofA
Securities is also providing Barnes with committed bridge financing
for the transaction.
Simpson Thacher & Bartlett LLP acted as legal counsel and
Goldman Sachs & Co. and RBC Capital Markets acted as financial
advisors to MB Aerospace.
Conference Call / Webcast
Barnes management will hold a conference call and simultaneous
webcast to discuss the proposed acquisition of MB Aerospace on
Tuesday, June 6, 2023, at 8:30 a.m. (ET). The public may access the
conference through a live audio webcast available on the Investor
Relations section of the Barnes website at www.onebarnes.com. The
conference is also available by direct dial at (888) 510-2379 in
the U.S. (646) 960-0691 outside of the U.S.; Conference ID 1137078.
Supplemental materials will be posted to the Investor Relations
section of the Company's website prior to the conference call.
In addition, the call will be recorded and available for
playback from 12:00 p.m. (ET) on Tuesday, June 6, 2023, until 11:59
p.m. (ET) on Monday, June 12, 2023, by dialing (647) 362-9199;
Conference ID 1137078.
About Barnes Aerospace
Barnes Aerospace is a global provider of complex fabricated and
precision-machined components and assemblies for OEMs of turbine
engines, nacelles, airframes and industrial gas turbines, and the
military. In addition, Barnes Aerospace provides aircraft engine
component MRO services for many of the world's major turbine engine
manufacturers, commercial airlines and the military and also
manufactures and delivers aftermarket spare parts.
About Barnes
Barnes Group Inc. (NYSE: B) pioneers technologies to help change
the world. Leveraging world-class manufacturing capabilities and
market-leading engineering, we develop advanced processes,
automation solutions and applied technologies for industries
ranging from medical and personal care to mobility, packaging, and
aerospace. Customers benefit from our integrated hardware and
software capabilities focused on improving the processing, control,
service and sustainability of engineered plastics, factory
automation technologies, and precision components. For more
information, please visit www.onebarnes.com.
Forward-Looking Statements
This press release contains forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements address our expected future operating
and financial performance and financial condition, and often
contain words such as "anticipate," "believe," "expect," "plan,"
"strategy," "estimate," "project," and similar terms. These
forward-looking statements do not constitute guarantees of future
performance and are subject to a variety of risks and uncertainties
that may cause actual results to differ materially from those
expressed in the forward-looking statements. These risks include
uncertainties relating to conditions in financial markets; currency
fluctuations and foreign currency exposure; future financial
performance of the industries or customers that we serve; our
ability to successfully close and integrate and achieve anticipated
synergies associated with recently announced and future
acquisitions, including the acquisition of MB Aerospace described
herein; risks associated with international sales and operations,
including with respect to the forecasted growth of MB Aerospace’s
businesses; the ability to maintain adequate liquidity and
financing sources; and general economic conditions affecting the
industries we serve. A detailed discussion of these and other
factors that may affect our future results is contained in Barnes
Group Inc.’s filings with the U.S. Securities and Exchange
Commission, including its most recent reports on Form 10-K, 10-Q,
and 8-K. The Company assumes no obligation to update our
forward-looking statements.
Note Regarding Certain Financial Information
Barnes’ net leverage ratio is a financial metric that is used by
management to assess Barnes’ borrowing capacity and is calculated
as the ratio of bank defined debt less cash divided by bank defined
Consolidated EBITDA. References to Consolidated EBITDA with respect
to Barnes refers to Consolidated EBITDA, as defined in Barnes’
existing credit agreement. The anticipated adjusted operating
margin and adjusted EPS accretion in 2024 exclude short-term
purchasing accounting adjustments and other adjustments not
reflective of ongoing results, which management believes provides
the Company and its investors with an indication of baseline
performance. MB Aerospace’s calendar 2023 revenue and EBITDA are
each based on 2023 unaudited prospective financial information. The
forward-looking net leverage ratio provided above reflects Barnes’
illustrative combined revenue and Consolidated EBITDA including MB
Aerospace. As permitted by Regulation G, Barnes does not provide
quantitative reconciliations of such forward-looking non-GAAP
financial information to the comparable GAAP measure, because the
calculation of such measures is inherently uncertain and difficult
to predict and is unavailable without unreasonable efforts. Such
items could have a substantial impact on GAAP measures of Barnes’
financial performance. In addition, Barnes believes such
reconciliations would imply a degree of precision and certainty
that could be confusing to investors.
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version on businesswire.com: https://www.businesswire.com/news/home/20230605005329/en/
Investors: Barnes Group Inc. William Pitts Vice
President, Investor Relations 860.583.7070
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