It’s Official: CZ Buys Colt for $220m And Stock Shares
CZ buys Colt and the official announcement has been made. Colt Holding Company LLC announced that as of February 11, 2021, it executed a definitive agreement to be acquired by CZG – Česká zbrojovka Group SE. Colt Holding Company LLC is the parent company of U.S. firearms manufacturer, Colt’s Manufacturing Company LLC as well as its Canadian subsidiary, Colt Canada Corporation.
CZ Buys Colt And The Terms Are Announced
Subject to the terms and conditions of the definitive agreement, CZG shall acquire a 100 percent stake in Colt for upfront cash consideration of $220 million and the issuance of 1,098,620 shares of newly issued CZG common stock. The agreement also provides for potential earnout consideration of up to 1,098,620 shares of newly issued CZG common stock if defined EBITDA thresholds are achieved in years 2021 – 2023.
Colt Now Part Of Extensive Firearms Group
Commenting on the announcement, Lubomír Kovařík, President and Chairman of CZG, said, “This merger is a strategic step for both companies. 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 500 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.”
Dennis Veilleux, President and CEO of Colt, agreed. “We are very pleased with the prospect of such a strategic combination.
“Having completed a historic turn-around 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.”
CZ Buys Colt For Cash
The acquisition is to be financed from CZG’s existing cash resources, including recent IPO proceeds, and from a contemplated bond issuance by CZG. The transaction is subject to regulatory approval but is anticipated to close in the second quarter of 2021.
With this strategic move, 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 (which relationship dates back over 175 years) and, through its Canadian subsidiary, Colt is a designated exclusive supplier of small arms to the Canadian military.
CZ Has Plants In Czech Republic And The U.S.
CZG, together with its subsidiaries, is one of the leading European producers of firearms for military and law enforcement, personal defense, hunting, sport shooting and other civilian use.
CZG markets and sells its products mainly under the CZ (Česká zbrojovka), CZ-USA, Dan Wesson, Brno Rifles and 4M Systems brands. CZG is headquartered in the Czech Republic.
It has production facilities in the Czech Republic and in the United States and employs around 1,650 people in the Czech Republic, the United States and Germany.
For more information on CZ and Colt firearms, go to CZ-USA.com or wwwColt.com.
Steven Paul Barlow is a retired sergeant/station commander and former firearms instructor with the New York State Police. He is an avid hunter, fisherman, and enthusiast with all things related to firearms, knives, and survival. He has been writing on outdoor topics for more than 35 years. His collections of outdoor humor stories are available at BriarHill Books.
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