ATK, which already owns ammo brands such as Federal Premium, CCI and Speer, as well as Blackhawk!, Weaver and more, just added Savage Arms to their extensive holdings. Savage is known for their accurate bolt action rifles, which should pair nicely with an ammunition manufacturer. Could this be ATK looking to build themselves into a Freedom Group killer? Or simply expanding their operations to work on some new and interesting projects? Make the jump for the press release . . .
ARLINGTON, Va., May 13, 2013 /PRNewswire/ — ATK (NYSE: ATK) announced it has entered into an agreement to acquire Caliber Company, the parent company of Savage Sports Corporation. Savage is one of the world’s largest manufacturers of hunting rifles and shotguns, delivering innovative products for more than 100 years. The acquisition would expand ATK’s portfolio offering by adding long guns to its leading brands in commercial and security ammunition, shooting sports and security-related accessories. The transaction is subject to regulatory approvals and customary closing conditions. ATK anticipates closing the transaction in the first quarter of its Fiscal Year 2014 (FY14), which ends June 30, 2013.
Under the terms of the transaction, ATK will pay $315 million in cash, subject to a customary working capital adjustment. This represents a trailing twelve months ended March 31, 2013 EBITDA multiple of approximately 5.5 times (unaudited). ATK believes the acquisition will be accretive to FY14 earnings per share. ATK will finance the acquisition with cash on hand and funds available under its existing credit facility.
“The acquisition will complement ATK’s growing portfolio of leading consumer brands,” said Mark DeYoung, ATK President and CEO. “This opportunity will allow us to build upon our offerings with Savage’s prominent, respected brands known for accuracy, quality, innovation, value and craftsmanship. Savage’s sales distribution channels, new product development, and sophistication in manufacturing will significantly increase our presence with a highly relevant product offering to distributors, retailers and consumers.”
Operating under the brand names of Savage Arms, Stevens, and Savage Range Systems, the company designs, manufactures and markets centerfire and rimfire rifles, shotguns and shooting range systems used for hunting as well as competitive and recreational target shooting. The company was organized in 1894 by Arthur Savage and has expanded into market-leading positions. Savage is located in Westfield, Mass. and Lakefield, Ontario, and employs approximately 600 skilled employees.
“Savage offers customers a unique value proposition that is unmatched by any other firearms manufacturer and will be a tremendous complement to ATK’s existing ammunition and shooting accessories portfolio,” said Al Kasper, Savage President and Chief Operating Officer.
ATK will integrate Savage within its Sporting Group business. ATK’s Sporting Group is the established leader in sporting and law enforcement ammunition and shooting accessories. ATK’s ammunition brands include Federal Premium, CCI, Fusion, Speer, Estate Cartridge and Blazer. ATK’s accessories brands include BLACKHAWK!, Alliant Power, RCBS, Champion targets and shooting equipment, Gunslick Pro and Outers gun-care products, and Weaver optics and mounting systems.
Caliber Company has been a portfolio company of Norwest Equity Partners (NEP), a leading middle market equity investment firm, since January 2012. NEP is headquartered in Minneapolis, Minn.
ATK is an aerospace, defense, and commercial products company with approximately 15,000 employees and operations in 21 states, Puerto Rico, and internationally. ATK is headquartered in Arlington, Va. News and information can be found on the Internet at www.atk.com, on Facebook at www.facebook.com/atk, or on Twitter @ATK.
Certain information discussed in this press release constitutes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Although ATK believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those factors are: failure to obtain necessary governmental approvals; assumptions regarding the timing and certainty of the transaction; failure of the parties to satisfy the closing conditions in the purchase agreement in a timely manner or at all; changes in interest rates or credit availability; the risk that the anticipated benefits and cost savings from the transaction may not be fully realized or may take longer than expected to realize; the ability of ATK to retain and hire key personnel and maintain relationships with customers, suppliers and other business partners of Savage; costs or difficulties related to the integration of the business following completion of the transaction; and changes in the business, industry or economic conditions or competitive environment. ATK undertakes no obligation to update any forward-looking statements. For further information on factors that could impact ATK, and statements contained herein, please refer to ATK’s most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed with the U.S. Securities and Exchange Commission.
Once Savage started outsourcing to China I knew the end was near.
They did what?
So you are saying the Savage factory I drive by every day is not making the parts for their rifles?
The “Stevens” pump action shotguns that Savage sells are made in China.
Canada via Lakefield in ON which they purchase some time ago, China, Uhm, no! And, if you know about anthing in their history you know they have crawled back from Bankruptcy after being owned by Black and Decker.
And Hawk Industries from China. Ever notice those Ithaca 37 and Winchester 1200 clones in the back of the Savage catalog?
So its all good that the freedom group produces 870 clones in China for H&R?, I’m all for American made firearms but Savage bolt guns are made in America and Canada, Stevens shotguns are made in China and Turkey.
buy high, sell low. exactly like my Scottrade account.
Savage gets it stocks from over seas, but I have toured the facility with the Production Manager who is a friend of a friend, and they are doing a fine job. They straighten/align all their barrels with the naked eye. Its a cool trick they demonstrated to us and is a large part of why their rifles are so accurate out of the box. I can assure you that thier Westfield, MA plant that I live 15 minutes from is making quality firearms.
Do they do plant tours? If they do I might have to check it out.
Westfield Mass. huh. Yet another firearms industry heavyweight that needs to put it’s customers first and move to a free state. Why provide tax revenue for politicians that hate what you produce?
ATK primarily sustains itself with government contracts. Something to think about anyway.
I love my Savages and hope to add a few more to the gun safe. I hope this transaction doesn’t lead to any reduction in quality or offerings available.
My son bought 1 of those Savage Axiom budget hunting rifles with scope packages. When he took it to the range the first time there was a problem with the chamber, it had a bur in it that was jamming extraction and damaging the .308 brass.
He called Savage and the next day they had a brown truck there to pick it up. In less than 3 weeks the rifle was back. Amongst other rifles we had it to the range this weekend and it works just fine now.
Any company can make a lemon. How the company deals with that situation tells you what you need to know about the company. I will do business with Savage in the future.
ATK is therefore the parent firm of the parent firm that owns Federal Ammo? I didn’t know that one.
More than just Federal.
http://www.atk.com/business-groups/atk-sporting/
Could this be ATK looking to build themselves into a Freedom Group killer?
Probably just the opposite. Cerberus Capital, TFG’s parent, has already announced that it’s exiting the firearms business. I’m thinking that Norwest Equity Partners, Savage’s current owner, is doing the same.
Good then companies like ATK that want to be in the business can buy them out… Economy 101 keep stocks in companies that are doing well, why on earth would an investor drop the stock in any company selling guns and ammunition in this climate? If it’s for the children, then the investors are making sure their 16 y/o doesn’t get a Cadillac for sweet 16.
Many equity investment funds invest OPM — other people’s money, not just their own. If a fund gets pressure from the “other people” who object to the investments, they have a choice. I expect that many investment companies will pull out of firearms and ammunition. But, as you noted, other companies who want to be in the firearms business will be happy to buy the gun companies, sometimes for a song.
The firearms industry is best without the witless idiots who run hedge/PE funds on Wall Street trying to strip-mine equity out of firearms companies.
The surest path to corporate failure these days is to have one of these hedge/PE companies start running the show. They all have the attention span of a guppy.
Likely the correct situation. Norwest is one of the most PC organizations around.
I read BowTech isn’t part of the deal. I would think ATK would have wanted them too. My guess is Norwest found archery politically correct enough to keep.
That’s a dandy looking 93 FV in the picture…….
How about resurrecting the Savage 99 in .250 and .300 Savage? Just askin (and dreaming)
wonder what will happen to Lakefield.
Lakefield?
Canada?
Bought a Savage 20 g today. Sadly it was manufactured in the PRC. China. Very misleading stamp on the barrel saying Savage MA, imported from PRC.
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