Barnes to Acquire MB Aerospace

BRISTOL, Conn.–(BUSINESS WIRE)–Barnes Group Inc. (NYSE: B) today announced that it has entered into a definitive agreement to acquire MB Aerospace. 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.

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.