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What: Shares of Barnes Group jumped 15% today, after announcing the sale of one of its businesses.
So what:MSC Industrial Direct said it would buy Barnes' distribution business for $550 million. The deal is expected to add $0.15 to $0.20 in earnings per share to MSV in fiscal 2014.
Now what: This is the smallest of Barnes' businesses, and has the lowest margin, so it will allow the company to focus resources on other areas. The price seems generous to Barnes' shareholders given its $29.4 million in operating profit during 2012. I think this is a good move for Barnes and will strengthen the balance sheet going forward, which could help the stock move higher.
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The article Why Barnes Group's Shares Popped originally appeared on Fool.com.
Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends MSC Industrial Direct. The Motley Fool owns shares of MSC Industrial Direct. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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