Barnes Group Inc., a global provider of highly engineered products, differentiated industrial technologies, and innovative solutions, today announced that it has entered into a definitive agreement to sell its Associated Spring and Hänggi businesses to One Equity Partners. The transaction is valued at $175 million, inclusive of a $15 million seller promissory note due in 24 months. Expected net cash proceeds of $150 million will be used to reduce debt incurred from the strategic acquisition of MB Aerospace in August 2023. Barnes remains committed to achieving a Net Debt to EBITDA ratio, as defined in its credit agreements, of 3.0x or lower by the end of 2024 and reaffirms its long-term leverage goal of 2.5x by 2025.

Thomas J. Hook, President and Chief Executive Officer of Barnes said, “Over the past year, we have been executing a comprehensive business transformation strategy based on three key pillars — Execute Core Business; Scale Aerospace; and Integrate, Consolidate & Rationalize Industrial — to generate improved growth, profitability, and cash flow at Barnes. Informed by a comprehensive strategic review of our business by independent advisors, we have continuously shared progress updates on our journey. Today’s announced divestiture demonstrates a leap forward in rationalizing our Industrial business and rebalancing our portfolio toward our industry-leading Aerospace business.”

“Additionally, this transaction allows us to pay down debt, enabling lower interest expense and meaningful tax benefits. Associated Spring and Hänggi are solid businesses with a long heritage and blue-chip customer base. We are confident that One Equity will bring the dedicated focus and necessary resources to grow this business,” added Hook.

Associated Spring and Hänggi are leaders and innovators in engineered spring and precision metal component manufacturing, progressive stamping, micro-stamping, and fine blanking. The brands are part of Barnes’ Motion Control Solutions strategic business unit within the Industrial Segment and serve automotive, general industrial, and other markets. Combined, the businesses had approximately $200 million in revenues over the last twelve months with over 800 employees worldwide and manufacturing operations in the United States, Mexico, Brazil, Switzerland, and Singapore.

“We are thrilled to partner with Associated Spring and Hänggi’s strong leadership team and talented employees. One Equity has extensive experience in the diversified industrials space and in acquiring high-performing businesses through carveout transactions. We look forward to working with the team to expand this platform through organic growth initiatives and transformational acquisitions, a hallmark of our strategy,” said Ante Kusurin, Managing Director of One Equity Partners.

Hook concluded, “The combination of our recent MB Aerospace acquisition and this divestiture dramatically shifts Barnes’ portfolio toward markets with higher growth and margin opportunities. Following the close, our Aerospace Segment will account for a majority of our consolidated revenues and an even larger percentage of our earnings. Further, our exposure to automotive will be materially lower. While we still have work to do in executing our strategic transformation, we remain committed to reshaping and positioning Barnes for success by executing on our three strategic pillars to deliver value to shareholders.”

The transaction is expected to close early 2024 subject to regulatory and other customary closing conditions. Barnes leadership will provide additional details on the company’s Q4 and Full Year 2023 earnings call on February 16, 2024.

BofA Securities served as financial advisor and Foley & Lardner LLP served as legal counsel to Barnes.