(Bloomberg) -- Barington Capital is urging TriMas Corp. to focus on its packaging business and divest non-core assets because its multi-segment business model isn’t delivering value to shareholders.
The activist investor contends that TriMas’ aerospace unit, which product fasteners and bolts for aircraft, is a long-term disadvantage because it remains subscale relative to rivals even though it has recovered from the coronavirus pandemic slump. The company should improve its margins for the segment and sell it in 2025, Barington Chief Executive Officer James Mitarotonda said Monday during a presentation at the Bloomberg Activism Forum.
Barington, which has taken a stake in TriMas, argues the company should also divest one of its specialty products businesses while energy markets are strong. The unit, Arrow Engine, produces equipment for oil and gas production and selling it would eliminate a potential distraction if markets turn negative.
TriMas should also consider selling its second specialty products business, Norris Cylinder, or make it part of a pure-play packaging operation, Barington said.
A representative for TriMas didn’t immediately respond to requests for comment.
Shares of TriMas, based in Bloomfield Hills, Michigan, had fallen 7.6% this year before Monday’s conference. The shares rose as much as 2.3% on Monday. They were up 1.5% to $26.03 at 3:18 p.m. in New York trading, giving the company a market value of about $1.1 billion.
A pure-play packaging business could help TriMas boost its value to $42 to $54 a share in three years, representing a 65% to 116% improvement, Barington said.
In October TriMas appointed Vitaliy Rusakov, who worked at Howmet Aerospace, as president of its aerospace unit, the company’s second-largest segment, according to a statement.
Activist investor Engaged Capital, led by Glenn Welling, took a stake in TriMas in 2015, resulting in a cooperation pact, according to a statement at the time.
In 2019, Barington took a position in L Brands Inc. and campaigned for the company to separate its Victoria’s Secret business. The lingerie maker became a standalone public company in 2021, while L Brands changed its name to Bath & Body Works.
(Updates with TriMas share gain in sixth paragraph.)
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