BARINGTON CAPITAL GROUP CALLS FOR TRIMAS TO CONSIDER A RANGE OF STRATEGIC ALTERNATIVES TO ADDRESS IT LONG-TERM SHARE PRICE UNDERPERFORMANCE
Rhea-AI Summary
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.
Positive
- Potential for value creation through strategic alternatives
- Undervalued Packaging and Aerospace segments according to Barington's analysis
- Strong consolidation trend in the aerospace sector
Negative
- 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
News Market Reaction 1 Alert
On the day this news was published, EML declined 5.36%, reflecting a notable negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
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.
FAQ
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