SCOTTSDALE, Ariz., Feb. 11, 2021 (GLOBE NEWSWIRE): AMMO, Inc. (Nasdaq: POWW) (“AMMO” or the “Company”), a premier American ammunition and munition components manufacturer and technology leader, is pleased to announce it has entered into a non-binding letter of intent (“LOI”) dated February 9, 2021 with IA Tech LLC for its GunBroker.com business (GunBroker.com), the world’s largest on-line auction marketplace dedicated to firearms, hunting, shooting and related products. The Transaction will involve a merger or business combination resulting in GunBroker.com becoming a wholly-owned subsidiary of AMMO (the “Transaction”).

GunBroker.com Transaction

  • GunBroker.com is the world’s leading online marketplace for the legal sale of firearms, ammunition and accessories with over 6.0 million registered users
  • GunBroker.com’s estimated 2020 revenue of approximately $60 million, over $40 million of EBITDA, positive net income and strong free cash flow
  • Purchase price of approximately $240 million, representing a purchase price to EBITDA multiple of less than 6.0x
  • Transaction further expands upon AMMO’s vertical integration strategy
  • Current AMMO shareholders will own the majority of the combined company

“This Transaction is accretive to our shareholders and will be another vertical integration milestone for the Company which diversifies our revenue base with high profit-margin business offered through a premier brand deploying best-in-class secure transactional technology,” said Fred Wagenhals, AMMO’s Chairman and CEO.

Mr. Wagenhals noted that “we founded AMMO to be a disruptive technology-based company that could serve the shooting community with cutting-edge ammunition offerings, whether that be for the military, law enforcement, hunting or recreational shooting communities. GunBroker.com is a perfect fit and supports AMMO’s mission across many levels. Steve Urvan had the foresight and entrepreneurial drive to start GunBrokers.com more than 20 years ago with the same spirit and vision. With his drive and intimate understanding of how to serve our collective market, Steve created the world’s largest online marketplace for the purchase and sale of firearms, ammunition, and accessories.” Mr. Wagenhals explained that “the combination made sense to our management team and Board as it expands our ability to best ensure the retail market continues to be served at the highest level while affording AMMO with an opportunity to enhance its sales channels, operating margins and drive increased shareholder value.”

Steve Urvan commented: “I am excited at the prospect of bringing the GunBroker.com technology platform, marketplace, and my world-class team to the AMMO family of companies. GunBroker.com has long been the technology leader in the industry and we look forward to continuing to build innovative products and solutions for our expanding and loyal customer base.”

Pursuant to the terms of the LOI, the parties intend to sign a definitive agreement (the “Definitive Agreement”) and work expeditiously to close the Transaction on or before March 31, 2021. The final structure of the Transaction will be determined by the parties following the receipt of tax, corporate, and securities law advice. GunBroker.com’s enterprise value in the Transaction has been valued at approximately $240 million, which will be paid by the Company via a combination of cash and shares of common stock.

The completion of the Transaction is subject to a number of conditions, including but not limited to the following: completion of mutually satisfactory due diligence, execution of the Definitive Agreement, successful completion of a capital raise, and receipt of all required corporate and third-party approvals, including fulfillment of all applicable regulatory requirements and conditions necessary to complete the Transaction.

No assurances can be made that the parties will successfully negotiate and enter into a Definitive Agreement, or that the proposed Transaction will be closed on the terms and/or timeframe currently contemplated, or at all. As noted above, the Transaction remains subject to a regulatory and Board approval, along with other customary conditions.

Maxim Group LLC served as sell side advisor to IA Tech LLC for its GunBroker.com business.

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24 COMMENTS

  1. Gunbroker may be the biggest auction site, but seems to have a crappy reputation for business practices. Not aware of AMMO Inc, but wonder if Gunbroker will be a better company after the merger?

      • And why drop over 200 million dollars for something that can literally be legislated out of existence in the next 3+years?

        • Yeah that seems like a mighty risky roll of the dice.

          As for 3 years….it is more likely to be closer to 3 weeks.

      • Ah yes Gunpoker – plenty of over priced firearms well beyond MSRP. It’s like going to Cabelas only more expensive. Tried selling one item and the buyer did not send me all the money. So I sent the money back and Gunpoker still took their money from the sale I never was actually able to complete. I’m done with Gunpoker regardless of who owns them.

        • “plenty of over priced firearms well beyond MSRP”

          That’s the classic mistake of only looking at the prices being asked for the ones that *haven’t* sold. The ones that do sell go at market rate, by definition.

        • I got plenty of firearms to sell you at “market rate”. Never seen a deal on there and probably never will if you wanna over pay I got plenty of guns for you.

      • I’ve alerted them to obvious shill bidding and other deceptive practices and they did nothing, and didn’t seem the least bit bothered about it. So now I pretty much avoid them unless it is an absolute must have item I can’t find elsewhere.

    • I have purchased six firearms through GunBroker and have had no issues whatsoever with any of the sellers I have dealt with. And I have had success in buying firearms for very good prices, unlike the pricing strategy of the sellers on GunsAmerica.

  2. Problem for selling and buying are the ever increasing taxes, shipping, CC fees and the FFL In the end purchasing online can look like a phone bill. Bought and sold plenty of goodies off GB without any problems…but we still shop around.

  3. So there will be a new site from which I can see ‘Sold Out’ below every god damned offering…

  4. I wonder why Parler can’t use the same hosting service that Gun Broker uses? You’d think a company that hosts a gun auction site would be fine with hosting Parler.

  5. I echo the “why” sentiment? One of the Canon’s of the Dims is “no more online sales”. Whatever as I have never bought a gat or gun accessories online. I use Gunbroker to get a sense of legitimate prices…

  6. “I’ve used gunbroker several times.
    I’ve never found it to be unethical or non biblical.”

    My only personal experience with GB was way back. Wanted to query a seller about an item, and an account and fee was required to make contact. Two more tries with the same result, and I walked away.

  7. “I have purchased six firearms through GunBroker and have had no issues whatsoever with any of the sellers I have dealt with.”

    Good news.

    I use GunsAmerica just to look at “rare” or unusual items. No direct experience.

  10. Hmmm…

    It seems like a very poor time to even consider buying into an internet gun auction site unless you have some serious insider information.

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