One of the most iconic names in American firearms is about to be added to the portfolio of brands that now fall under Czech Republic-based CZ Group. The company has signed an agreement to acquire 100 percent of the outstanding equity in Colt Holding Company LLC, the parent company of Colt’s Manufacturing Company LLC, as well as its Canadian subsidiary, Colt Canada Corporation.
According to reports, terms of the agreement call for an upfront cash consideration of $220 million and the issuance of 1,098,620 shares of newly issued CZG common stock, as well as the potential for issuance of future shares of CZG common stock.
“This merger is a strategic step for both companies,” said Lubomír Kovařík, president and chairman of CZG. “The acquisition of Colt, an iconic brand and a benchmark for the military, law enforcement and commercial markets globally, fits perfectly in our strategy to become the leader in the firearms manufacturing industry and a key partner for the armed forces. We are proud to include Colt, which has stood shoulder-to-shoulder with the U.S. Army for over 175 years, in our portfolio. We believe in the successful connection of our corporate cultures, the proven track record of the current management team and the complementary nature of the CZ and Colt brands. The combined group will have revenues in excess of USD 600 million and presents a real small arms powerhouse. The experience of CZ and Colt management will further strengthen both brands and ensure CZ and Colt continue to deliver top quality products and solutions to all our customers.”
CZG will acquire significant production capacity in the United States and Canada and substantially expand its global customer base. Colt is a traditional supplier to global military and law enforcement customers. Among others, Colt is a long-term supplier to the U.S. Army (a relationship that dates back more than 175 years) and, through its Canadian subsidiary, Colt is a designated exclusive supplier of small arms to the Canadian military.
“We are very pleased with the prospect of such a strategic combination,” said Dennis Veilleux, President and CEO of Colt. “Having completed a historic turnaround of the operations and financial performance at Colt over the past five years, this important next step with CZG positions the company to take advantage of significant growth opportunities. We are excited to join forces with CZG which will be a powerful combination for both brands and for our customers.”
The acquisition is to be financed from the company’s existing cash resources, including recent IPO proceeds, and from the contemplated bond issuance. The transaction is subject to regulatory approval but is anticipated to close in the second quarter of 2021.
Image courtesy czg.cz