Olin Corporation, the parent of Winchester Ammunition, has entered into a definitive agreement with Ammo, Inc. to acquire the company’s small-caliber ammunition manufacturing assets for a purchase price of $75 million, funded using available liquidity. The assets will become part of Olin’s Winchester Ammunition business.
The acquisition reportedly includes Ammo’s brass shell case capabilities and its 185,000-square-foot production plant in Manitowoc, WI, constructed in 2022.
The transaction, which the company reported to be unanimously approved by Ammo’s Board of Directors, was the culmination of a comprehensive strategic review process during which Ammo worked with independent advisors to engage with an array of prospective buyers.
“Following a thorough process supported by our independent financial and legal advisors, the [Ammo] Board determined that a sale of Ammo’s ammunition manufacturing assets to Olin is in the best interest of the company’s stockholders and positions us for long-term success,” commented Christos Tsentas, chair of the M&A Committee of Ammo, Inc.’s Board of Directors.
“We believe the company has significant opportunities to grow and scale GunBroker.com as the e-commerce space for the firearms and shooting sports industries continues expanding. We expect this sale will enable us to capitalize on these opportunities while allowing the company to become a more focused, streamlined and profitable organization,” Tsentas concluded.
“Upon completion of this transaction, the company expects to focus on growing and prioritizing the profitable, high-margin GunBroker.com marketplace,” Ammo, Inc. said in a statement.
The company said its Manitowoc facility and employees will complement Winchester’s production capabilities, enabling “greater specialization and broader participation across high-margin specialty calibers.”
Once fully integrated with Winchester’s economies of scale and integration across its commercial ammunition value chain — from raw material sourcing to projectiles, primers, and loading capabilities — the acquisition is anticipated to yield realized synergies of $40 million, according to a company statement.
“The Manitowoc assets will extend Winchester’s leadership position and expand the reach and value of our near full integration,” said Brett Flaugher, president of Winchester Ammunition. “The acquired assets will enable our legacy plants to lower costs of existing high-volume products and increase our ability to participate in higher margin specialty rounds at a cost advantage.”
Ken Lane, president and CEO of Olin Corporation, remarked, “As highlighted during our recent Investor Day, this investment continues the Winchester acquisition strategy, which began with our White Flyer acquisition in 2023, to identify and secure small bolt-on opportunities that are highly strategic and immediately accretive to Olin. We expect the Manitowoc assets to generate $15 million to $20 million of incremental adjusted EBITDA in the first year and, by the third year, we expect to have paid less than two times adjusted EBITDA.”
The transaction is subject to customary terms and closing conditions and is expected to close in the second quarter of 2025, subject to satisfaction of customary conditions, and completed in the second calendar quarter of 2025.
Ammo said it will undertake a rebranding process and complete a corporate name change upon closing the transaction.
Ammo was advised by Baird and represented by Bryan Cave Leighton Paisner LLP. Lake Street Capital Markets provided a fairness opinion to the Ammo Board.
Updates on Independent Investigation and Historical Financial Statements
As disclosed in a Form 8-K filed with the U.S. Securities and Exchange Commission (SEC) on September 24, 2024, a Special Committee of the Ammo Board has retained a law firm to conduct an independent investigation focused on fiscal years 2020 through 2023 related to certain disclosure and accounting matters. The independent investigation is said to be “in its final stages.”
“Furthermore, the company previously disclosed that certain historical financial statements and auditors’ reports previously filed by the company should no longer be relied upon,“ Ammo reported.
The company expects to provide investors with an update on such financial statements in the first calendar quarter of 2025.
Image courtesy Ammo, Inc.
