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Barnes (B) Divests Spring & Hanggi Units to One Equity Partners

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Barnes Group Inc. (B - Free Report) recently announced the completion of the sale of its Associated Spring and Hänggi businesses to One Equity Partners for $175 million, out of which payment of $21 million will be made after the transfer of certain foreign assets. This deal was announced in January 2024.

Headquartered in New York, One Equity Partners is a middle-market private equity company that invests in the industrial, technology and healthcare sectors in North America and Europe. The company has assets under management of more than $10 billion.

Spring and Hänggi businesses are engaged in producing engineered spring and precision metal components, micro-stamping, progressive stamping and fine blanking spaces. These businesses cater to general industrial, automotive and other end markets.

The divestment of Spring and Hänggi businesses will help Barnes to focus more on its core business and rebalance its portfolio toward the Aerospace segment. With the divestment, B will be able to integrate, combine and rationalize its Industrial business. Barnes will utilize the net cash proceeds from the transaction, worth $140 million, to reduce the debt incurred from the MB Aerospace buyout in August 2023.

Barnes believes that the divestment, along with its buyout of MB Aerospace, will enable it to shift its business portfolio toward higher growth and margin markets. This divestment is in sync with the company’s business transformation strategy, which includes disposing of businesses to unlock values for its shareholders.

Zacks Rank and Price Performance

Barnes currently carries a Zacks Rank #4 (Sell).

Barnes’ motion control solutions and automation businesses within the Industrial segment have been facing challenges. Shipment delays and lagging orders remain worrisome for the segment.

However, Barnes is poised to benefit from its well-diversified portfolio. The company’s Aerospace segment is benefiting from volume increases within both the OEM and Aftermarket businesses.

In the past year, the stock has lost 9.9% against the industry’s 32.8% growth.

Zacks Investment Research
Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked companies from the Industrial Products sector are discussed below:

Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter average earnings surprise of 10.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 1.7% in the past 60 days. The stock has gained 50.6% in the past year.

Belden Inc. (BDC - Free Report) presently carries a Zacks Rank #2 (Buy) and a trailing four-quarter earnings surprise of 12.3%, on average.

BDC’s earnings estimates have remained steady for 2024 in the past 60 days. Shares of Belden have risen 15.3% in the past year.

A. O. Smith Corporation (AOS - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 12%.

The Zacks Consensus Estimate for AOS’ 2023 earnings increased 0.5% in the past 60 days. Shares of A. O. Smith have soared 34.9% in the past year.

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