by Gun Week staff
Remington Arms Company is being acquired by New York-based private equity firm of Cerberus Capital Management LP for the sale price of $118 million. Current chairman at Cerberus is John W. Snow, former treasury secretary under President George W. Bush.
The announcement came April 5, but the deal is not likely to close until sometime in June.
According to a Remington press release, the acquisition includes the assumption of all of Remington Arms’ funded indebtedness, estimated at about $252 million, that is related to the Revolving Credit Facility, and 10.5% Senior Subordinated Notes due in 2011. That brings the total value of the transaction to $370 million.
Remington CEO Tommy Millner said, “This transaction is an acknowledgment of the Remington tradition, its strong brand, and the excellent products built over 191 years through innovation and by our dedicated employees. Further, this new partnership signals our intent to continue the path of enhancing our production capabilities and product offerings, in order to further grow our presence domestically and internationally.”
Remington is the only major company that currently makes both firearms and ammunition for hunting and law enforcement.
Millner said the agreement will fuel research and development of new products, both for sportsmen and women, but also the military.
Remington was one of the very first companies to withdraw its corporate support from the Outdoor Writers Association of America (OWAA) in 2004 after a dispute erupted within that organization over a letter the then-board of directors sent to then National Rifle Association (NRA) President Kayne B. Robinson. The letter admonished Robinson for remarks he made at an NRA-sponsored breakfast at the OWAA conference in Spokane, WA, in June of that year.
Cerberus Capital Management LP, according to Wikepedia, is a large private equity investment firm headquartered in New York, managing $23.5 billion in assets. It was founded in 1992. The firm invests in companies that are near bankruptcy with the intention of making them profitable.
According to the Bloomberg News, Remington was able to post its first profit in three years in 2006, although it remains the nation’s oldest and largest firearms manufacturer. The company was founded in 1816 by Eliphalet Remington II in Ilion Gulch, NY, near where a company plant is still operating. It was purchased by the DuPont Corporation during the Great Depression.
Remington was sold by the private equity firms Bruckmann, Rosser, Sherrill & Co. and Clayton Dubilier & Rice Co. Based out of Madison, NC, Remington showed its first profit in years last year, but it has been an uphill struggle. Some of the rocks in that uphill road may have been planted by Smith & Wesson (S&W). In the last few years, S&W has branched out into its own brand name of gun cleaning supplies, clothing, law enforcement gear, knives and airguns. But what has probably been the biggest recent competition for Remington are S&W’s recent offerings of rifles and shotguns.