SEC Form DEFA14A filed by Barnes Group Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 8-K

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CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  December 30, 2024

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BARNES GROUP INC.

(Exact name of registrant as specified in its charter)

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Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

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The second paragraph on Page 56 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Goldman Sachs & Co. LLC – Illustrative Discounted Cash Flow Sum-of-the-Parts Analysis” is hereby amended and supplemented as follows:

 

Goldman Sachs derived ranges of illustrative enterprise values for each of Barnes Ex-RSP and RSP by adding the ranges of present values it derived above. Goldman Sachs then subtracted from the ranges of illustrative enterprise values it derived for Barnes Ex-RSP, the amount of Barnes’ net debt as of June 30, 2024 of approximately $1,112 million as provided by and approved for Goldman Sachs’ use by Barnes management, to derive a range of illustrative equity values for Barnes Ex-RSP. Illustrative equity value of RSP was calculated on a debt free, cash free basis. Goldman Sachs then divided the ranges of illustrative equity values it derived for each of Barnes Ex-RSP and RSP by the number of fully diluted outstanding shares of Barnes, as provided by and approved for Goldman Sachs’ use by the management of Barnes, using the treasury stock method, as of October 4, 2024, ranging from approximately 51.9 million to 52.4 million, calculated using the treasury stock method and data provided by and approved for Goldman Sachs’ use by the management of Barnes, and derived a range of illustrative present values per share of the Barnes common stock from $25 to $45 for Barnes Ex-RSP and $14 to $18 for RSP, rounded to the nearest dollar. Goldman Sachs added together the ranges of illustrative present values per share of the Barnes common stock of each of Barnes EX-RSP and RSP to derive a range of illustrative present values per share of the Barnes common stock ranging from $39 to $62, rounded to the nearest dollar.

The third paragraph on Page 56 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Goldman Sachs & Co. LLC – Illustrative Present Value of Share Price Analysis” is hereby amended and supplemented as follows:

 

For each of Barnes and, using publicly available information, the selected publicly traded companies, Goldman Sachs calculated (i) the EV/NTM EBITDA of the closing price per share of Barnes common stock as of June 25, 2024 of 8.8x and the average of EV/NTM EBITDA multiples of Barnes for the one-year, three-year and five-year periods ended June 25, 2024 of 8.5x, 9.3x and 10.1x, respectively, and (ii) the EV/NTM EBITDA average of EV/NTM EBITDA multiples of the closing price per share of the selected publicly traded companies as of October 4, 2024 of 9.4x and the average of EV/NTM EBITDA multiples of the selected publicly traded companies for the one-year, three-year and five-year periods ended October 4, 2024 of 9.7x, 9.0x and 9.2x, respectively.

The table on Page 57 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Goldman Sachs & Co. LLC  – Selected Transactions Analysis” is hereby amended and restated as follows:

 

Announcement Date		Selected Transactions in the Aerospace Industry				EV of Target		EV / LTM EBITDA Unless Otherwise Stated
		Acquiror		Target		(in millions)
March 2015		Alcoa Corporation		RTI International Metals, Inc.		$1,500		13.1x
August 2021		Parker Hannifin Corporation		Meggitt PLC		₤7.120		16.3x(1)
September 2021		Bain Capital, LP		ITP Aero (Industria de Turbo Propulsores, S.A.)		€1,800		15.1x
May 2023		HEICO Corp.		Wencor Group, LLC		$2,050		13.4x(2)
June 2023		Kohlberg Kravis Roberts & Co. L.P.		CIRCOR International, Inc.		$1,630		13.1x
June 2023		Barnes Group Inc.		MB Aerospace Holdings Inc.		$740		11.4x(3)
December 2023		AAR Corp.		Triumph Group, Inc.’s Product Support Business		$725		14.5x
January 2024		Arcline Investment Management, L.P.		Kaman Corporation		$1,870		16.7x
July 2024		Platinum Equity Advisors, LLC		Héroux-Devtek Inc.		C$1,362		14.8x

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The table on Page 58 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Goldman Sachs & Co. LLC  – Selected Transactions Analysis” is hereby amended and restated as follows:

 

Announcement Date		Selected Transactions in the Industrial Industry				EV of Target		EV / LTM EBITDA Unless Otherwise Stated
		Acquiror		Target		(in millions)
April 2014		Blackstone Inc.		Gates Corporation		$5,400		9.4x
August 2015		Berkshire Hathaway Inc.		Precision Castparts Corp.		$37,200		12.3x
March 2018		Altra Industrial Motion Corp.		Fortive Corporation’s Automation & Specialty Business		$3,000		13.6x
July 2019		Hillenbrand, Inc.		Milacron Holdings Corp.		$2,030		9.4x
July 2019		Parker Hannifin Corporation		Exotic Metals Forming Company LLC		$1,725		12.9x(1)
February 2021		Regal Beloit Corporation		Rexnord Corporation’s Process & Motion Control Business		$3,688		14.2x
October 2022		Regal Rexnord Corporation		Altra Industrial Motion Corp.		$4,950		13.6x

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The first sentence in the first paragraph on Page 58 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Goldman Sachs & Co. LLC  – Selected Transactions Analysis” is hereby amended as follows:

 

The second sentence in the first paragraph on Page 58 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Goldman Sachs & Co. LLC  – Selected Transactions Analysis” is hereby amended and supplemented as follows:

 

Based on the results of the foregoing calculations and Goldman Sachs’ professional judgment and experience, Goldman Sachs applied a reference range of EV/LTM adjusted EBITDA multiples of 9.4x to 16.7x to Barnes’ LTM pro forma adjusted EBITDA as of June 30, 2024, as provided by and approved for Goldman Sachs’ use by the management of Barnes, to derive a range of implied enterprise values for Barnes. Goldman Sachs then subtracted the net debt of Barnes as of June 30, 2024 of approximately $1,112 million, as provided by and approved for Goldman Sachs’ use by the management of Barnes, and divided the result by the number of fully diluted outstanding share of Barnes common stock as of October 4, 2024, as provided by and approved for Goldman Sachs’ use by the management of Barnes, to derive a reference range of implied values per share of the Barnes common stock of $31 to $71, rounded to the nearest dollar.

The eighth sentence in the third full paragraph on Page 59 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Goldman Sachs & Co. LLC ” is hereby amended and supplemented as follows:

 

Affiliates of Goldman Sachs & Co. LLC also may have are currently co-invested with Apollo and its affiliates from time to time and may have invested in limited partnership units of affiliates of Apollo from time to time and may do so in the future.

The second and third sentences of the first full paragraph on Page 62 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC” are hereby amended and supplemented as follows:

 

With respect to the selected public companies and selected precedent transactions analyses summarized below, no company or transaction used as a comparison was identical or directly comparable to Barnes, its business segments or the Merger. These analyses necessarily involved complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading, acquisition or other values of the companies, businesses or transactions concerned.

The second sentence of the fourth full paragraph on Page 63 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC – Financial Analyses – Selected Public Companies Analyses – Consolidated” is hereby amended and supplemented as follows:

 

Jefferies applied selected ranges of calendar year 2024 and calendar year 2025 estimated adjusted EBITDA multiples derived from the Barnes selected companies of 10.0x to 13.0x and 9.0x to 12.0x (selected based on Jefferies’ professional judgment and informed by, among other things, the median calendar year 2024 and calendar year 2025 estimated adjusted EBITDA multiples observed for the Barnes selected companies and the financial profile, end-market exposure and scale of Barnes relative to the Barnes selected companies), respectively, to the calendar year 2024 estimated pro forma adjusted EBITDA and calendar year 2025 estimated adjusted EBITDA of Barnes, respectively.

 

The second sentence of the fifth full paragraph on Page 64 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC – Financial Analyses – Selected Public Companies Analyses – Sum-of-the-Parts” is hereby amended and supplemented as follows:

 

Jefferies applied selected ranges of calendar year 2024 and calendar year 2025 estimated adjusted EBITDA multiples derived from the selected aerospace companies of 10.5x to 13.5x and 9.5x to 12.5x (selected based on Jefferies’ professional judgment and informed by, among other things, the median calendar year 2024 and calendar year 2025 estimated adjusted EBITDA multiples observed for the selected aerospace companies and the financial profile, end-market exposure and scale of the Barnes aerospace business relative to the selected aerospace companies), respectively, to the calendar year 2024 and calendar 2025 estimated adjusted EBITDA attributable to the Barnes aerospace business, respectively, excluding such business’ revenue sharing programs, which was separately evaluated as described below under “—Discounted Cash Flow Analyses—Revenue Sharing Programs.”

 

The second sentence of the third full paragraph on Page 65 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC – Financial Analyses – Selected Public Companies Analyses – Sum-of-the-Parts” is hereby amended and supplemented as follows:

 

Jefferies applied selected ranges of calendar year 2024 and calendar year 2025 estimated adjusted EBITDA multiples derived from the selected MS companies of 10.5x to 12.5x and 8.75x to 10.75x (selected based on Jefferies’ professional judgment and informed by, among other things, the median calendar year 2024 and calendar year 2025 estimated adjusted EBITDA multiples observed for the selected MS companies and the near-term differences in timing of profitability and financial profile, end-market exposure and scale of the Barnes MS business relative to the selected MS companies), respectively, to the calendar year 2024 and calendar 2025 estimated adjusted EBITDA attributable to the Barnes MS business, respectively.

 

The second sentence of the sixth paragraph beginning on Page 65 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC – Financial Analyses – Selected Public Companies Analyses – Sum-of-the-Parts” is hereby amended and supplemented as follows:

 

Jefferies applied selected ranges of calendar year 2024 and calendar year 2025 estimated adjusted EBITDA multiples derived from the selected MCS companies of 9.5x to 11.5x and 8.5x to 10.5x (selected based on Jefferies’ professional judgment and informed by, among other things, the median calendar year 2024 and calendar year 2025 estimated adjusted EBITDA multiples observed for the selected MCS companies and the financial profile, end-market exposure and scale of the Barnes FMC business relative to the selected MCS companies), respectively, to the calendar year 2024 estimated pro forma adjusted EBITDA and calendar year 2025 estimated adjusted EBITDA attributable to the Barnes FMC business, respectively.

 

The second sentence of the third full paragraph on Page 66 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC – Financial Analyses – Selected Public Companies Analyses – Sum-of-the-Parts” is hereby amended and supplemented as follows:

 

Jefferies applied selected ranges of calendar year 2024 and calendar year 2025 estimated adjusted EBITDA multiples derived from the selected automation companies of 11.5x to 13.5x and 9.5x to 11.5x (selected based on Jefferies’ professional judgment and informed by, among other things, the median calendar year 2024 and calendar year 2025 estimated adjusted EBITDA multiples observed for the selected automation companies and the financial profile, end-market exposure and scale of the Barnes automation business relative to the selected automation companies), respectively, to the calendar year 2024 and calendar 2025 estimated adjusted EBITDA attributable to the Barnes automation business, respectively.

 

The second sentence of the third paragraph on Page 67 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC – Financial Analyses – Selected Precedent Transactions Analysis” is hereby amended and supplemented as follows:

 

Jefferies applied a selected range of latest 12 months adjusted EBITDA multiples derived from the selected transactions of 11.5x to 13.5x (selected based on Jefferies’ professional judgment and informed by, among other things, the median latest 12 months adjusted EBITDA multiple observed for the selected transactions and the financial profile, end-market exposure and scale of Barnes relative to the target companies or businesses involved in the selected transactions) to the latest 12 months (as of June 30, 2024) pro forma adjusted EBITDA of Barnes.

 

The second sentence of the third paragraph on Page 68 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC – Financial Analyses – Discounted Cash Flow Analyses – Consolidated (Without Revenue Sharing Programs)” is hereby amended and supplemented as follows:

 

For purposes of this analysis, stock-based compensation was treated as a cash expense and Barnes’ net debt was allocated between (i) Barnes, excluding its aerospace business’ revenue sharing programs, and (ii) Barnes’ aerospace revenue sharing programs, based on their respective contributions to Barnes’ total implied enterprise value.

 

The third sentence of the third paragraph on Page 68 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC – Financial Analyses – Discounted Cash Flow Analyses – Consolidated (Without Revenue Sharing Programs)” is hereby amended and supplemented as follows:

 

Jefferies calculated terminal values for Barnes by applying to Barnes’ fiscal year 2028 normalized unlevered, after-tax free cash flow a selected range of perpetuity growth rates of 3.5% to 4.5% (selected based on Jefferies’ professional judgment).

 

The fourth sentence of the third paragraph on Page 68 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC – Financial Analyses – Discounted Cash Flow Analyses – Consolidated (Without Revenue Sharing Programs)” is hereby amended and supplemented as follows:

 

 

The following sentence is added after the first sentence of the fourth paragraph on Page 68 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC – Financial Analyses – Discounted Cash Flow Analyses – Revenue Sharing Programs”:

 

For purposes of this analysis, Barnes’ net debt was allocated between (i) Barnes’ aerospace revenue sharing programs, and (ii) Barnes, excluding its aerospace business’ revenue sharing programs, based on their respective contributions to Barnes’ total implied enterprise value.

The second sentence of the fourth paragraph on Page 68 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC – Financial Analyses – Discounted Cash Flow Analyses – Revenue Sharing Programs” is hereby amended and supplemented as follows:

 

Jefferies calculated terminal values for the Barnes aerospace business’ revenue sharing programs by applying to the fiscal year 2028 normalized after-tax free cash flow expected to be generated by such programs a selected range of perpetuity growth rates of (3.0)% to (1.0)% (selected based on Jefferies’ professional judgment).

The third sentence of the fourth paragraph on Page 68 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC – Financial Analyses – Discounted Cash Flow Analyses – Revenue Sharing Programs” is hereby amended and supplemented as follows:

The present values (as of June 30, 2024) of the cash flows and terminal values were then calculated using a selected range of discount rates of 10.5% to 11.5% derived from a weighted average cost of capital calculation.

The first bullet point of the sixth paragraph beginning on Page 68 under “Proposal 1: Adoption of the Merger Agreement – Opinions of Barnes’ Financial Advisors – Opinion of Jefferies LLC – Certain Additional Information” is hereby amended and supplemented as follows:

 

The following sentence is added after the first sentence of the fifth paragraph on Page 70 under “Proposal 1: Adoption of the Merger Agreement – Certain Financial Projections”:

 

The RSP Business fulfills Barnes’ obligations under contracts signed with GE Aerospace from 2000 through 2010 pursuant to which Barnes has an exclusive right to supply certain aftermarket parts to GE Aerospace over the life of certain engine programs.  Given the nature of the RSP Business, a relatively small percentage of corporate-level general and administrative costs is allocable to the RSP Business.

The following sentence is added after the second sentence of the seventh paragraph beginning on Page 70 under “Proposal 1: Adoption of the Merger Agreement – Certain Financial Projections”:

 

Given the nature of the RSP Business, a relatively small percentage of corporate-level general and administrative costs is allocable to the RSP Business.

Participants in the Solicitation

Forward-Looking Statements

This filing contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements often contain words such as “anticipate,” “believe,” “expect,” “plan,” “estimate,” “project,” “continue,” “will,” “should,” “may,” and similar terms. These forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that may cause actual results to differ materially from any future results expressed or implied by the forward-looking statements. In addition, we have based some of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Such factors, risks and uncertainties include: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement between the parties to the proposed transaction or extend the anticipated timetable for completion of the proposed transaction; (2) the failure to obtain approval of the proposed transaction from Barnes’ shareholders; (3) the failure to obtain certain required regulatory approvals or the failure to satisfy any of the other closing conditions to the completion of the proposed transaction within the expected timeframes or at all; (4) risks related to disruption of management’s attention from Barnes’ ongoing business operations due to the proposed transaction; (5) the effect of the announcement of the proposed transaction on the ability of Barnes to retain and hire key personnel and maintain relationships with its customers, suppliers and others with whom it does business, or on its operating results and business generally; (6) the ability of Barnes to meet expectations regarding the timing and completion of the transaction; (7) the impacts resulting from the conflict in Ukraine, the Middle East or any other geopolitical tensions; and (8) the impacts of any pandemics, epidemics or infectious disease outbreaks.

For additional information and detailed discussion of these risks, uncertainties, and other potential factors that could affect our business and performance and cause actual results or outcomes to differ materially from the results, performance or achievements addressed in our forward-looking statements is included in our other filings with the SEC, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. Barnes assumes no obligation to update its forward-looking statements, which speak as of their respective dates, whether as a result of new information, future events, or otherwise.

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

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