BARINGTON CAPITAL GROUP CALLS FOR TRIMAS TO CONSIDER A RANGE OF STRATEGIC ALTERNATIVES TO ADDRESS IT LONG-TERM SHARE PRICE UNDERPERFORMANCE
Barington Capital Group, owning 1.5% of TriMas (TRS), has called for the company to consider strategic alternatives to address long-term share price underperformance. Since Barington's previous letter in December 2023, TriMas has underperformed its peers and the Russell 2000 index. Barington argues that TriMas' multi-segment structure has not benefited stockholders and suggests two alternatives: selling the Aerospace segment or the entire company.
TriMas currently trades at 8.6x NTM consensus EBITDA, which Barington believes undervalues its Packaging and Aerospace segments. The aerospace sector is consolidating due to strong travel and defense demand, and some of TriMas' multi-segment industrial peers have been acquired at substantial premiums. Barington urges the TriMas Board to promptly seek value-creating alternatives to improve shareholder value.
Barington Capital Group, detentrice dell'1,5% di TriMas (TRS), ha chiesto all'azienda di considerare alternative strategiche per affrontare la scarsa performance del prezzo delle azioni a lungo termine. Dalla precedente lettera di Barington nel dicembre 2023, TriMas ha registrato performance inferiori rispetto ai suoi concorrenti e all'indice Russell 2000. Barington sostiene che la struttura multi-segmento di TriMas non ha giovato agli azionisti e suggerisce due alternative: vendere il segmento Aerospaziale o l'intera azienda.
TriMas attualmente scambia a 8,6x l'EBITDA consensuale NTM, che Barington ritiene svaluti i suoi segmenti Imballaggio e Aerospaziale. Il settore aerospaziale si sta consolidando a causa della forte domanda nel settore viaggi e difesa, e alcuni dei concorrenti industriali multi-segmento di TriMas sono stati acquisiti a premi sostanziali. Barington invita il Consiglio di TriMas a cercare rapidamente alternative in grado di creare valore per migliorare il valore per gli azionisti.
Barington Capital Group, que posee el 1,5% de TriMas (TRS), ha instado a la empresa a considerar alternativas estratégicas para abordar el mal desempeño del precio de sus acciones a largo plazo. Desde la carta anterior de Barington en diciembre de 2023, TriMas ha tenido un rendimiento inferior al de sus pares y al índice Russell 2000. Barington argumenta que la estructura multi-segmento de TriMas no ha beneficiado a los accionistas y sugiere dos alternativas: vender el segmento Aeroespacial o la empresa completa.
TriMas actualmente se negocia a 8,6x el EBITDA consensuado NTM, que Barington considera que subestima sus segmentos de Empaque y Aeroespacial. El sector aeroespacial se está consolidando debido a la fuerte demanda en viajes y defensa, y algunos de los pares industriales multi-segmento de TriMas han sido adquiridos a primas sustanciales. Barington insta a la Junta de TriMas a buscar rápidamente alternativas que generen valor para mejorar el valor de los accionistas.
Barington Capital Group은 TriMas (TRS)의 1.5%를 보유하고 있으며, 회사가 장기적인 주가 저조를 해결하기 위해 전략적 대안을 검토할 것을 촉구했습니다. 2023년 12월 Barington의 이전 서신 이후 TriMas는 동종업체 및 러셀 2000 지수보다 저조한 성과를 기록했습니다. Barington은 TriMas의 다중 세그먼트 구조가 주주에게 혜택을 주지 못했다고 주장하며 두 가지 대안을 제안합니다: 항공 우주 부문 또는 전체 회사를 매각 할 것.
현재 TriMas는 NTM 컨센서스 EBITDA 기준으로 8.6배에 거래되고 있으며, Barington은 이것이 포장 및 항공 우주 부문의 가치를 과소 평가하고 있다고 믿습니다. 항공 우주 부문은 여행과 방산 수요의 증가로 통합되고 있으며, TriMas의 다중 세그먼트 산업 동종업체 중 일부는 상당한 프리미엄으로 인수되었습니다. Barington은 TriMas 이사회에 주주 가치를 개선하기 위해 즉각적으로 가치 창출 대안을 모색할 것을 촉구합니다.
Barington Capital Group, détenant 1,5% de TriMas (TRS), a appelé l'entreprise à envisager des alternatives stratégiques pour aborder la sous-performance à long terme du prix de ses actions. Depuis la précédente lettre de Barington en décembre 2023, TriMas a sous-performé par rapport à ses pairs et à l'indice Russell 2000. Barington soutient que la structure multi-segment de TriMas n'a pas bénéficié aux actionnaires et suggère deux alternatives : vendre le segment Aérospatial ou l'ensemble de l'entreprise.
TriMas se négocie actuellement à 8,6x l'EBITDA consensuel NTM, ce que Barington considère comme une sous-évaluation de ses segments Emballage et Aérospatial. Le secteur aéronautique est en consolidation en raison de la forte demande dans les secteurs du voyage et de la défense, et certains des pairs industriels multi-segment de TriMas ont été acquis à des primes substantielles. Barington exhorte le conseil d'administration de TriMas à rechercher rapidement des alternatives créatrices de valeur afin d'améliorer la valeur pour les actionnaires.
Barington Capital Group, die 1,5% von TriMas (TRS) hält, hat das Unternehmen aufgefordert, strategische Alternativen in Betracht zu ziehen, um die langfristige Underperformance des Aktienkurses anzugehen. Seit dem vorherigen Schreiben von Barington im Dezember 2023 hat TriMas seine Mitbewerber und den Russell 2000-Index unterperformt. Barington argumentiert, dass die Multi-Segment-Struktur von TriMas den Aktionären nicht zugute gekommen ist, und schlägt zwei Alternativen vor: den Verkauf des Luftfahrtsegments oder des gesamten Unternehmens.
TriMas wird derzeit mit dem 8,6-fachen des konsensualen EBITDA für NTM gehandelt, was Barington für eine Unterbewertung der Verpackungs- und Luftfahrtsegmente hält. Der Luftfahrtsektor konsolidiert sich aufgrund der starken Nachfrage im Reise- und Verteidigungsbereich, und einige der multisegmentalen Industriekonkurrenten von TriMas wurden zu erheblichen Aufschlägen übernommen. Barington fordert den Vorstand von TriMas auf, umgehend wertschaffende Alternativen zu suchen, um den Shareholder-Value zu verbessern.
- Potential for value creation through strategic alternatives
- Undervalued Packaging and Aerospace segments according to Barington's analysis
- Strong consolidation trend in the aerospace sector
- Long-term share price underperformance compared to peers and market
- TriMas' total shareholder return has lagged over 1-, 3-, 5-, 7- and 10-year periods
- Multi-segment structure reportedly not benefiting stockholders
- Recent underperformance: +4.6% total shareholder return vs. +26.8% for peers and +19.1% for Russell 2000
Insights
As a financial analyst, I find this news highly significant for TriMas and its shareholders. The call from Barington Capital Group for strategic alternatives highlights several critical points:
- TriMas has consistently underperformed its peers and the broader market over various time horizons, including 1-, 3-, 5-, 7- and 10-year periods.
- The company's current trading multiple of
8.6x NTM consensus EBITDA appears to undervalue its Packaging and Aerospace segments. - There's a notable discrepancy between TriMas' valuation and recent acquisition multiples in the aerospace sector and among multi-segment industrial peers.
The two proposed alternatives - selling the Aerospace segment or the entire company - could potentially unlock significant shareholder value. This activist pressure might catalyze a reassessment of TriMas' corporate structure and strategy, potentially leading to major changes. Investors should closely monitor the board's response and any subsequent strategic shifts, as these could have substantial implications for the stock's performance in the near to medium term.
It's worth noting that Barington's stake, at approximately
From a strategic perspective, Barington's critique of TriMas' multi-segment structure is particularly intriguing. The assertion that this structure "has done little to benefit stockholders" challenges a fundamental aspect of TriMas' business model. This raises several key considerations:
- The potential synergies (or lack thereof) between TriMas' different segments
- The efficiency of capital allocation across these diverse business units
- The ability of management to effectively oversee and optimize performance across multiple, potentially unrelated, business lines
The suggestion to sell the Aerospace segment is especially noteworthy given the current market dynamics. With the aerospace sector experiencing consolidation and benefiting from robust travel and defense demand, this could indeed be an opportune time for such a divestiture. It could allow TriMas to focus on its core competencies while potentially realizing a premium valuation for the Aerospace unit.
Alternatively, the proposal to sell the entire company suggests that Barington believes TriMas might be more valuable as part of a larger entity or in the hands of private equity. This could be due to potential operational synergies, more efficient capital allocation, or simply the belief that the market is undervaluing TriMas' assets.
Regardless of the outcome, this activist intervention is likely to prompt a thorough review of TriMas' strategy, potentially leading to significant changes in the company's structure and focus. Shareholders should prepare for a period of strategic reassessment and possible corporate action.
TriMas' Shares have Underperformed its Peers and the Market Over a Long-Term Period
Believes TriMas' Multi-Segment Structure has Done Little to Benefit Stockholders
Recommends TriMas Sell its Aerospace Segment or the Entire Company
Since the release of Barington's prior letter on December 12, 2023, TriMas has delivered a total shareholder return of +
James Mitarotonda, Chairman of Barington, said, "Unfortunately, this recent period of underperformance is merely the continuation of what has been a long-term problem. As stated in our prior letter, TriMas' total shareholder return has materially lagged its peers and the market as a whole over the past 1-, 3-, 5-, 7- and 10-year periods. It appears to us that TriMas' multi-segment structure has done little to benefit stockholders."
TriMas currently trades at 8.6x NTM consensus EBITDA – a multiple well below what the Company's Packaging and Aerospace segments are worth, according to Barington's analysis.3 Barington notes that the aerospace sector continues to consolidate due to the robust outlook for travel and defense demand. In addition, a few of TriMas' multi-segment industrial peers have recently been acquired. In both cases, the multiples paid for the target companies were at substantial premiums to TriMas' current NTM consensus EBITDA multiple.
For these reasons, Barington sees two compelling alternatives that the TriMas Board should immediately pursue to improve shareholder value – (i) sell the Aerospace segment or (ii) sell the entire Company.
Mr. Mitarotonda continued, "After many years of attempting to create value for shareholders, which has largely been ineffective, we believe it is imperative that the Board promptly seek value creating alternatives, either by selling the Aerospace segment or the entire Company."
The full text of Barington's letter to the Company is available at https://barington.com/trimas
About Barington Capital Group, L.P.
Barington Capital Group, L.P. is a fundamental, value-oriented activist investment firm established by James A. Mitarotonda in January 2000. Barington invests in undervalued publicly traded companies that Barington believes can appreciate significantly in value when substantive improvements are made to their operations, corporate strategy, capital allocation and corporate governance. Barington's investment team, advisors and network of industry experts draw upon their extensive strategic, operating and boardroom experience to assist companies in designing and implementing initiatives to improve long-term shareholder value.
1 Peer information based on index created from the 2023 Peer Group listed in TiMas' 2024 Proxy Statement, Aerojet Rocketdyne Holdings Inc., AptarGroup, Inc., Astronics Corporation, Barnes Group Inc., Chart Industries, Inc., CIRCOR International, Inc., Ducommun Incorporated, Enerpac Tool Group Corp., Enpro Inc., ESCO Technologies Inc., Myers Industries, Inc., NN, Inc., Standex International Corporation, Triumph Group, Inc. and Woodward, Inc. Index is market capitalization weighted.
2 Total shareholder return information based on S&P Capital IQ for the period 12/11/23-7/25/24, including the reinvestment of dividends.
3 Information based on S&P Capital IQ as of 7/25/24. Enterprise value excludes operating leases. NTM refers to next twelve months consensus mean estimate.
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SOURCE Barington Capital Group, L.P.
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