Remington Arms has been Sold...
- Thread starter Rustystud
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Remington to Be Bought by Cerberus for $118 Million,Update6)
By Danielle Kost
April 5,Bloomberg) -- Remington Arms Co., the gunmaker that has equipped U.S. soldiers for 150 years, agreed to be acquired by private-equity firm Cerberus Capital Management LP for $118 million.
The company, based in Madison, North Carolina, produced its first profit in three years in 2006 after struggling with rising materials costs and increased competition from Smith & Wesson Holding Corp., maker of the .44 Magnum used in the ``Dirty Harry'' movies. Remington was sold by New York-based private- equity firms Bruckmann, Rosser, Sherrill & Co. and Clayton Dubilier & Rice Co., according to a company statement today.
Cerberus is entering the $2.1 billion U.S. firearms industry, whose sales grew 2.6 percent, or by 4.7 million guns, in 2005, the most recent data from the Treasury Department show. American residents own 290 million guns, and Remington is the country's largest and oldest maker of rifles and shotguns.
Cerberus is ``getting a brand that has leadership in the rifle market,'' said Cai Von Rumohr, a Boston-based analyst at Cowen & Co. who follows Smith & Wesson.
Remington's management, led by Chief Executive Officer Thomas Millner, will remain in place, company spokesman Al Russo said.
Remington was founded in 1816 by Eliphalet Remington II, who built his flintlock rifle in Ilion Gulch, New York, after placing second in a shooting match and attracting the attention of other contestants. The company was rescued by the U.S. government after Russian revolutionaries defaulted on a contract in 1918 and benefited from its purchase during the Great Depression by DuPont Co., which made improvements to gun powder.
Winchester Rifles
Von Rumohr said Remington may be able to gain market share after U.S. Repeating Arms Co., which licenses the Winchester brand, discontinued three models and closed a factory in New Haven, Connecticut, where the rifles and shotguns were made for a century and a half.
The Remington transaction includes $252 million of debt. Cerberus spokeswoman JJ Rissi declined to comment on the deal's financial breakdown.
Remington stopped making handguns in the 1990s. Stricter federal and state laws governing the sale of pistols prompted gun manufacturers to narrow their focus on shotguns and rifles used for hunting and target shooting. The company's guns include the $812 700 BDL Custom Deluxe and $996 11-87 SPS Super Magnum.
In December, Smith & Wesson agreed to buy Thompson/Center Arms Inc. for $102 million to enter the hunting-rifle market. Springfield, Massachusetts-based Smith & Wesson, whose revenue is about half that of Remington, is known for its revolvers and pistols.
$300,000 Profit
Last year, Remington posted net income of $300,000 after three years of losses. Sales rose 8.7 percent to $446 million. Smith & Wesson last month said it anticipates earning $12 million on $225 million of sales in fiscal 2007. Remington had 2,150 employees at the end of February.
Bruckmann, Rosser, Sherrill owns 61.3 percent of Remington, and Clayton Dubilier & Rice holds 13 percent and controls 26.6 percent of the voting power.
Clayton Dubilier bought Remington's assets from DuPont in 1993 for $300 million. The Wilmington, Delaware-based chemical company purchased a 60 percent stake in the gunmaker in 1933 and acquired the remaining shares in 1980. During its 191-year history, Remington branched out to produce typewriters, sewing machines and cash registers, businesses it later divested.
Cerberus's acquisition adds to one of the busiest years for buyouts. The value of announced leveraged buyouts jumped 40 percent to $188 billion during the first quarter, led by the record $44.1 billion agreement to acquire Dallas-based power producer TXU Corp., data compiled by Bloomberg show.
Remington expects to complete the transaction by June 28. Credit Suisse Group advised New York-based Cerberus, which manages $23.5 billion.
By Danielle Kost
April 5,Bloomberg) -- Remington Arms Co., the gunmaker that has equipped U.S. soldiers for 150 years, agreed to be acquired by private-equity firm Cerberus Capital Management LP for $118 million.
The company, based in Madison, North Carolina, produced its first profit in three years in 2006 after struggling with rising materials costs and increased competition from Smith & Wesson Holding Corp., maker of the .44 Magnum used in the ``Dirty Harry'' movies. Remington was sold by New York-based private- equity firms Bruckmann, Rosser, Sherrill & Co. and Clayton Dubilier & Rice Co., according to a company statement today.
Cerberus is entering the $2.1 billion U.S. firearms industry, whose sales grew 2.6 percent, or by 4.7 million guns, in 2005, the most recent data from the Treasury Department show. American residents own 290 million guns, and Remington is the country's largest and oldest maker of rifles and shotguns.
Cerberus is ``getting a brand that has leadership in the rifle market,'' said Cai Von Rumohr, a Boston-based analyst at Cowen & Co. who follows Smith & Wesson.
Remington's management, led by Chief Executive Officer Thomas Millner, will remain in place, company spokesman Al Russo said.
Remington was founded in 1816 by Eliphalet Remington II, who built his flintlock rifle in Ilion Gulch, New York, after placing second in a shooting match and attracting the attention of other contestants. The company was rescued by the U.S. government after Russian revolutionaries defaulted on a contract in 1918 and benefited from its purchase during the Great Depression by DuPont Co., which made improvements to gun powder.
Winchester Rifles
Von Rumohr said Remington may be able to gain market share after U.S. Repeating Arms Co., which licenses the Winchester brand, discontinued three models and closed a factory in New Haven, Connecticut, where the rifles and shotguns were made for a century and a half.
The Remington transaction includes $252 million of debt. Cerberus spokeswoman JJ Rissi declined to comment on the deal's financial breakdown.
Remington stopped making handguns in the 1990s. Stricter federal and state laws governing the sale of pistols prompted gun manufacturers to narrow their focus on shotguns and rifles used for hunting and target shooting. The company's guns include the $812 700 BDL Custom Deluxe and $996 11-87 SPS Super Magnum.
In December, Smith & Wesson agreed to buy Thompson/Center Arms Inc. for $102 million to enter the hunting-rifle market. Springfield, Massachusetts-based Smith & Wesson, whose revenue is about half that of Remington, is known for its revolvers and pistols.
$300,000 Profit
Last year, Remington posted net income of $300,000 after three years of losses. Sales rose 8.7 percent to $446 million. Smith & Wesson last month said it anticipates earning $12 million on $225 million of sales in fiscal 2007. Remington had 2,150 employees at the end of February.
Bruckmann, Rosser, Sherrill owns 61.3 percent of Remington, and Clayton Dubilier & Rice holds 13 percent and controls 26.6 percent of the voting power.
Clayton Dubilier bought Remington's assets from DuPont in 1993 for $300 million. The Wilmington, Delaware-based chemical company purchased a 60 percent stake in the gunmaker in 1933 and acquired the remaining shares in 1980. During its 191-year history, Remington branched out to produce typewriters, sewing machines and cash registers, businesses it later divested.
Cerberus's acquisition adds to one of the busiest years for buyouts. The value of announced leveraged buyouts jumped 40 percent to $188 billion during the first quarter, led by the record $44.1 billion agreement to acquire Dallas-based power producer TXU Corp., data compiled by Bloomberg show.
Remington expects to complete the transaction by June 28. Credit Suisse Group advised New York-based Cerberus, which manages $23.5 billion.
Forum Boss
Administrator
Hmmm, it seems to me that's a good reason NOT to retain the existing management team. Look how S&W turned things around.
On the flip side, the Chapter 11 filing of Dakota Arms shows that you can't just have a bunch of venture capitalists take over a gun company. They didn't understand what the market wanted.
ArtinNC
Gold $$ Contributor
I don't think Remington knew what the market wanted. All they had to do was remove 13 ops from the 700 action,, and would have made the action cheaper to make ))and they would have a action like most of the copy cat custom actions . And with a new stock they could have had a supper varmint, F-class 1000yd factory rifle. NO they wouldn't want to show a profit. Art
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Administrator
What's also interesting is that Cerberus, a holding company that specializes in buying up companies that are on the verge of bankruptcy, also acquired Bushmaster a while back. Cerberus has also been VERY aggressive in working to get defense industry contracts for some of its other holdings. I suspect the "plan" is to try to secure the contract for the replacement to the AR15,whenever that finally happens).
It's to bad this had to happen. Can't predict the future... But typically they buy a name reduce the quality to garbage make as much as they can, run the name into the dirt and sell it.
I hope that is not the case.
I hope that is not the case.
butchlambert
Site $$ Sponsor
Remington was already owned by a holding company. I don't think that in itself gives us anything to worry about.
Butch
Butch
With most shooters not hunters, competive shooters really have much better choices these days.Company's that make actions like stiller, georgia percision,bat. etc make better actions.With the shooting sports in decline in some areas where ranges are closing and membership are down.It's no wonder winchester and remmy are having problems.
Hopefully the new people in charge will have more foresight than the ones they bought out..and really hopefully they will fire the entire management-lock,stock and barrel!! They haven't done anything right in my opinion for so long I can't remember when... Let's built some rifles that we'll actually but..how many 223's, 22/250's, 243's and .308's do we need..let's offer some factory 6.5/284's, 6 Br's, 6.5X47's etc.... they'll sell, just offer some neat version's of the 700's..Varmint, benchrest, F-class with some different stock and they'll actually sell something to most of us..
A new hotshot management team will take over, dominated by bean counters and twenty something MBAs who need to get promoted by showing a proffit in the first quarter. They are urban yuppies and have never seen a gun in thier lives and have no interest in them, and most are anti-gun. They will make the first quater proffits jump with two things. Quality down, prices up. In the second quarter they will get promoted and sell the company again at higher P/E ratio. Eventually the consumer will notice that thier products are shit and sales will die. Then someone will by the parts of the company and dismantel it.
ALL business is about making a proffit not about turing out a good product.
Jim Ratchford
ALL business is about making a proffit not about turing out a good product.
Jim Ratchford
Forum Boss
Administrator
Ratch,
I fear many of your concerns are valid--just look at the Dakota Arms melt-down to see what happens when venture capitalists are put in charge. However, Cerberus also owns Bushmaster, and Cerberus' CEO Stephen Feinberg is a staunch Republican who has shown a serious interest in securing big time defense contracts--that means a fairly long-term play. Thus far Cerberus' practice has not been to acquire business and dump them immediately. Instead they've tried to modernize the businesses, secure key major contracts, and restore profitability.
I fear many of your concerns are valid--just look at the Dakota Arms melt-down to see what happens when venture capitalists are put in charge. However, Cerberus also owns Bushmaster, and Cerberus' CEO Stephen Feinberg is a staunch Republican who has shown a serious interest in securing big time defense contracts--that means a fairly long-term play. Thus far Cerberus' practice has not been to acquire business and dump them immediately. Instead they've tried to modernize the businesses, secure key major contracts, and restore profitability.
Wow. That is very refreshing to hear and very reasuring. After what's happened to other fine American gun companies, that were international institions, and had names that were synonymous with American history, I sure hope your right. You sound like you know what you're talking about and I feel very good about what you've said.
But don't write off Democrates. The anti gunners are a small, loud eliment. I've been a fire arms enthusiast since I got my first Stevens single shot .22 at ten years of age. I'm one of those over educated, left of center Democrates from the Boston area. The town I grew up in had lots of hunters and shooters of all sorts. Lots of gun collectors. And they vote. Almost every guy I went to school with became military officers before they went to graduate school or into professional life and every one volunteered for Viet Nam. A few didn't come back. A few won a lot of medals. And they were, and still are Democrates. We have to nurture the Democratic pro-gun vote.
Jim
But don't write off Democrates. The anti gunners are a small, loud eliment. I've been a fire arms enthusiast since I got my first Stevens single shot .22 at ten years of age. I'm one of those over educated, left of center Democrates from the Boston area. The town I grew up in had lots of hunters and shooters of all sorts. Lots of gun collectors. And they vote. Almost every guy I went to school with became military officers before they went to graduate school or into professional life and every one volunteered for Viet Nam. A few didn't come back. A few won a lot of medals. And they were, and still are Democrates. We have to nurture the Democratic pro-gun vote.
Jim
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