On Monday, Truist Securities adjusted the price target for Barnes Group (NYSE:B), a global provider of highly engineered products, to $47.50, up from the previous target of $38.00. The firm has maintained a Hold rating on the stock. This adjustment follows the announcement of a definitive agreement for Apollo Global Management (NYSE:NYSE:APO) to acquire Barnes Group in an all-cash deal valued at approximately $3.6 billion, or $47.50 per share.
The acquisition price signifies a 22% premium over Barnes Group's closing share price on June 25, 2024, and a 28% premium to the volume-weighted average price for the 90 days prior to that date. The opening share price for Barnes Group was $46.60 today.
The transaction is anticipated to be finalized before the end of the first quarter of 2025, subject to approval from shareholders and regulatory bodies. The offer is estimated to represent approximately a 10.4 times multiple on the firm's forecasted EBITDA for the fiscal year 2025 and an 11.5 times multiple on the forecasted EBITDA for fiscal year 2024. These multiples signify a premium compared to Barnes Group's historical average multiple of 9.5 times, although it is still below the average peer group multiple of approximately 15 times.
Truist Securities' analysis also referenced a Sum-of-the-Parts (SOTP) valuation, which was published last week. This analysis took into account a previously reported potential offer of $45 per share and a June analysis that suggested a scenario where Barnes Group could be valued at approximately $57 per share.
In other related news, Barnes Group has entered into an agreement to be acquired by Apollo Global Management in an all-cash transaction valued at approximately $3.6 billion. This acquisition is expected to conclude by the end of Q1 2025, subject to customary closing conditions and regulatory clearances. As part of the agreement, Barnes shareholders will receive $47.50 per share in cash.
In response to this development, DA Davidson downgraded Barnes Group from Buy to Neutral and adjusted the stock price target to align with the offer price from Apollo Global Management. Meanwhile, Oppenheimer maintained an Outperform rating for Barnes Group, suggesting a purchase price of $55 per share based on projected earnings.
In terms of executive shifts, Barnes Group announced the appointment of Troy W. Ingianni as the new Principal Accounting Officer, succeeding Marian Acker who is transitioning to a Senior Advisor role.
InvestingPro Insights
The recent acquisition news for Barnes Group aligns with several key metrics and insights from InvestingPro. The company's market cap stands at $2.36 billion, which is close to the $3.6 billion acquisition value announced by Apollo Global Management. This suggests that the market has largely priced in the acquisition premium.
InvestingPro data shows that Barnes Group has been experiencing solid growth, with revenue increasing by 22.02% over the last twelve months as of Q2 2024, reaching $1.59 billion. The company's EBITDA growth of 58.11% during the same period is particularly impressive, indicating improving operational efficiency.
Two relevant InvestingPro Tips stand out. First, Barnes Group "has maintained dividend payments for 54 consecutive years," which speaks to the company's long-term financial stability and commitment to shareholder returns. This consistent dividend history likely contributed to its attractiveness as an acquisition target. Second, the stock is "trading near 52-week high," which is consistent with the acquisition news and the premium offered by Apollo.
For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips for Barnes Group, providing a deeper understanding of the company's financial health and market position.
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