Exclusive-Apollo Global in talks to buy aerospace parts maker Barnes Group, sources say

By Anirban Sen and Echo Wang

NEW YORK (Reuters) -Private equity firm Apollo Global Management is in talks to acquire Barnes Group, a manufacturer of aerospace components with a market value of about $2 billion, people familiar with the matter said on Thursday.

Bristol, Connecticut-based Barnes is negotiating granting exclusivity to Apollo, which is set to prevail over other buyout firms that were also vying for the company, the sources said, requesting anonymity as the discussions are confidential.

The deal is likely to value Barnes at more than $45 per share, one of the sources said. The company's shares, which have risen about 25% since the start of the year, jumped as much as 11% to $44.50 on Friday morning on the news.

If the talks are successful, a deal could be signed in the coming weeks, the sources said, cautioning a transaction is not guaranteed and another suitor could emerge if the talks with Apollo fall apart.

Barnes did not respond to requests for comment. Apollo declined to comment.

Founded in 1857, Barnes is a maker of components for companies in sectors such as packaging, healthcare, aerospace, consumer, and electronics. Barnes' aerospace unit makes parts for commercial and military turbine engines, while its industrials unit develops molding and automation solutions for various industries.

Barnes has about 5,700 employees and operates 43 manufacturing locations, according to its website.

In the quarter ended June 30, Barnes reported a net loss of $46.8 million and revenue growth of 12% to $382.2 million, which fell short of analysts' expectations.

Activist investor Irenic Capital took a stake in Barnes in 2022 and pushed the company to shake up its board and explore a strategic review. In March, Barnes entered into a cooperation agreement with Irenic and appointed its co-founder Adam Katz to its board of directors.

Apollo has been an active acquirer of companies in the industrials sector in recent years. Last year, Apollo struck an $8.1 billion deal to acquire chemical company Univar Solutions. It also agreed to buy industrial components maker Arconic for about $3 billion last year.

Bloomberg reported in June that Barnes was exploring strategic options including a sale.

(Reporting by Anirban Sen and Echo Wang in New York and Mike Stone in Washington; Editing by Jamie Freed)