Smith & Wesson Brands (SWBI -0.43%) is about to become a pure-play gunmaker stock again after it announced it will spin off its outdoor gear and accessories business on Aug. 24.

The gunsmith had been known as American Outdoor Brands for the past few years until management decided these are really two disparate businesses. So American Outdoor Brands will begin trading as a stand-alone company under the ticker symbol AOUT on the Nasdaq exchange.

Hiker with blanket roll and binoculars

Image source: Getty Images.

While Smith & Wesson had been slowly building up its outdoor products business following the acquisition of Battenfeld Technologies in 2014, it accelerated its presence in the space two years later by also buying knife maker Taylor Brands and laser maker Crimson Trace.

That set the stage for the gunmaker to abandon its well-known Smith & Wesson name in favor of the more generic-sounding American Outdoor Brands. Although outdoor products now account for around 25% of total revenue, growth hasn't been as great as originally envisioned, and the volatility that comes with the firearms business has swamped the contribution of outdoor gear.

Smith & Wesson will distribute all of American Outdoor Brands stock to investors who are Smith & Wesson Brands stockholders as of the close of business on Aug. 10. The spinoff is expected to be completed on Aug. 24 with investors receiving one share of AOUT for every four shares of SWBI they own. No fractional shares will be issued; cash will be distributed for any fraction left over.

The outdoor products and accessories market is orders of magnitude larger than the firearms market, so it will give American Outdoor Brands an opportunity to grow much larger. It is a crowded field with much larger players, meaning the spun-off company could end up being a small fish in a very large pond.