Barnes Buys MB Aerospace For $740M, Its Largest Acquisition Ever

Barnes Group Inc B has agreed to acquire MB Aerospace for an enterprise value of approximately $740 million.
MB Aerospace offers precision aero-engine component manufacturing and repair services serving aerospace and defense engine companies.
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.
Barnes expects the effective purchase price multiple to be around 11.4x 2023 EBITDA and 8.9x inclusive of pro forma estimated run-rate cost synergies.
With the acquisition, MB Aerospace will become part of Barnes Aerospace. The transaction is expected to close in Q4 2023 upon receipt of regulatory approvals and the satisfaction of other customary closing.
Following transaction closure, Barnes expects net leverage to be within 3.7x and 3.9x Consolidated EBITDA, projecting to reduce net leverage to below 3.0x within 12 months and 2.5x within 24 months.
Barnes expects MB Aerospace to generate revenues of around $330 million and an EBITDA of $65 million in 2023.
The company expects revenue growth, adjusted operating margin, and adjusted EPS accretion in 2024 from the deal.
"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," said Thomas J. Hook, President and CEO.
Barnes expects to finance the deal with cash and additional acquisition financing. B held $79 million in cash and $539 million available under the revolving credit facility.
Last month, Barnes reported Q1 2023 revenues of $335 million, beating the consensus of $313.4 million, and adjusted EPS of $0.47 exceeded the consensus of $0.39.
Price Action: Barnes shares are trading lower by 2.95% at $40.44 on the last check Monday.

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