Virginia-based ammo and munitions maker ATK (NYSE:ATK) is buying itself a new gunmaker.
ATK announced this morning that it has agreed to buy Caliber Co., the parent company of Savage Sports, for $315 million cash, representing a 5.5 multiple of its trailing-12-month EBITDA. Savage is one of the world's largest manufacturers of hunting rifles and shotguns and has been in business for more than 100 years. ATK anticipates the deal bringing long guns to its portfolio will close by the end of June.
Saying the acquisition will add to its growing portfolio of consumer brands including Federal Premium, CCI, Fusion, and Speer, ATK CEO Mark DeYoung said: "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."
Savage is located in Westfield, Mass., and Lakefield, Ontario, Canada, and operates under the brand names Savage Arms, Stevens, and Savage Range Systems. It designs, manufactures and markets centerfire and rimfire rifles, shotguns and shooting range systems used for hunting as well as competitive and recreational target shooting. It employs approximately 600 workers.
ATK believes the acquisition will be accretive to its current fiscal year earnings per share. It will finance the acquisition with cash on hand and funds available under its existing credit facility.
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