Breakup Plans Announced for Remington Arms and Its Associated Companies

On Sept. 29, 2020, Remington Arms and its associated companies will be divided in the United States Bankruptcy Court for the Northern District of Alabama.

Breakup Plans Announced for Remington Arms and Its Associated Companies

Some of the most well known companies in the outdoors industry have won approval in bankruptcy court proceedings to purchase brands associated with the Remington Outdoor Company.

On Sept. 27, 2020, the breakup plan for Remington Arms and its associated companies was filed. It will be finalized on Sept. 29 in the United States Bankruptcy Court for the Northern District of Alabama.

According to the filing:

— Remington’s Lonoke, Arkansas, ammunition business will go to Vista Outdoor ($81.4 million; with Sig Sauer as a backup bid);

— Sierra Bullets will acquire the Barnes Ammunition interests ($30.5 million bid);

— Ruger will acquire Marlin ($30 million bid);

— Franklin Armory will assume the Bushmaster brand and related assets;

— JJE Capital Holdings will assume DPMS, H&R, Stormlake, AAC, and Parker brands;

— Sportsman’s Warehouse will acquire the Tapco brand.

In total, the sale should bring more than $155 million.

This story will be updated as warranted.

Clarus Corporation: Sierra Bullets Acquires Barnes Bullets, Eyes Greater Growth

Clarus Corporation’s subsidiary Sierra Bullets was selected to acquire certain assets relating to the Barnes Bullets brand of specialty hunting bullets in a Chapter 11 bankruptcy auction process conducted by Remington Outdoor Company, Inc. and certain of its subsidiaries.

Founded in 1932 and headquartered in Mona, Utah, Barnes is an industry leader in manufacturing environmentally sound, lead-free bullets. Barnes is known for its superior quality and accuracy, offering a full line of premium component bullets and ammunition sold through nationally recognized retailers and e-commerce channels.  

Sierra Bullets is expected to acquire Barnes for $30.5 million in cash, pursuant to an asset purchase agreement. For the trailing 12 months ended June 30, 2020, Barnes Bullets reported $21.8 million in sales. The acquisition is anticipated to be immediately accretive to Clarus’ earnings.

“Barnes embodies the ‘innovate and accelerate’ playbook we seek with ‘super-fan’ brands,” said John Walbrecht, Clarus’ president. “Barnes is a leader in lead-free, all copper bullets, with a rich history of product innovation and strong brand awareness amongst the core enthusiast, yet it has untapped go-to-market potential. We believe these ingredients give us a heightened advantage to develop world-class products, increase brand awareness, expand product categories and improve distribution while staying true to the core user.”

The acquisition of Barnes presents multiple strategic and financial benefits to the Company’s bullet and ammunition platform, most notably the addition of a comprehensive lead-free, all copper offering.

Clarus’ Executive Chairman, Warren Kanders, said: “The Barnes acquisition caps our strategy to build a leader in specialty premium bullets and ammunition. We now have a platform of scale that we expect to continue to deliver strong recurring revenue with high gross margins and free cash flow conversion. This acquisition also demonstrates our ability to patiently wait for strategic assets at attractive values that we expect to drive growth and maximize our returns on invested capital. We look forward to further acquisition efforts being in similarly accretive, strategic areas outside of the bullet and ammunition market.”

Clarus’ CFO, Aaron Kuehne, added: “The opportunistic and strategic acquisition of Barnes represents an accretive, tuck-in asset that brings our bullet and ammunition business additional capacity in a period of great demand and improves our overall scale within our Sierra segment. In addition, the acquisition presents significant financial and operational synergies that we expect to maximize with our strong balance sheet. As such, we expect our leading specialty bullet and ammunition platform has long-term runway to becoming a segment with $100 million in sales generating 25-30% adjusted EBITDA margins.”

The transaction is subject to the approval of the United States Bankruptcy Court for the Northern District of Alabama. The hearing currently is scheduled for Sept. 29, 2020, and other customary closing conditions. Once approved, the negotiated asset purchase agreement will be entered into and the transaction is expected to close in October.

More financial details on Barnes Bullets will be disclosed in Clarus’ upcoming third quarter earnings call, which is anticipated to be in early November.

Vista Outdoor Acquires Remington Ammunition, Accessories Assets

Vista Outdoor will acquire certain assets related to Remington's ammunition and accessories businesses, including its ammunition manufacturing facility in Lonoke, Arkansas, and related intellectual property, including the Remington brand and trademarks.

Vista Outdoor has agreed to pay a gross purchase price of $81.4 million, subject to certain customary closing adjustments.

"Remington ammunition and accessories have a storied role in America's sporting heritage, with a legacy dating back to 1816," said Chris Metz, Vista Outdoor Chief Executive Officer. "We are excited and honored to add the iconic Remington brand and green box to Vista Outdoor's portfolio of ammunition brands, and Remington accessories to our portfolio of Hunting and Shooting Accessories. The Remington brand is beloved by hunting and shooting sports enthusiasts everywhere and we look forward to restoring it to greatness by leveraging Vista Outdoor's scale, manufacturing infrastructure, distribution channels and Centers of Excellence.

"We see a clear path to value creation. With our deep expertise and resources, we can transform Remington's ammunition and accessories businesses to create a more efficient, profitable and sustainable operation.  At the same time, by rescuing the Remington ammunition businesses from bankruptcy, we will protect hundreds of jobs, support wildlife and habitat conservation and ensure that hunting and shooting sports enthusiasts can continue to purchase their favorite ammunition and accessories. We look at this acquisition as a means of better serving millions of consumers with the products they love from one of the country's original and best-known brands, while furthering Vista Outdoor's mission of being a powerhouse of passionate outdoor sports and recreation brands," Metz added.

For calendar year 2019, aggregate net sales by the Remington ammunition and accessories brands were approximately $200 million.  Vista Outdoor expects the transaction to be accretive to earnings, excluding transaction and transition costs, in Fiscal Year 2022.

Vista Outdoor will be using cash on hand and available liquidity under its asset-based revolving credit facility to complete this transaction.

Assuming court approval is received as anticipated, Vista Outdoor expects to close the transaction early in the third quarter of FY21. Remington's other business units, including its firearms businesses, will be purchased by other bidders in the auction and operated independently from Vista Outdoor following the closing of those acquisitions


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