Ammo, Inc. announces that its Board of Directors has unanimously approved a plan to separate its ammunition and marketplace businesses into two independent publicly-traded companies.

Outdoor Online, Inc. will be comprised of GunBroker.com and its related online businesses. Current Ammo Chairman & CEO, Fred Wagenhals, will assume the Chairman & CEO role in Outdoor Online.

The second entity, Action Outdoor Sports, Inc. (AOS), will retain the company’s current ammunition and munition components business, including its Streak, Signature, Blackline, /stelTH/, Blueline, Ammo Brass, and Hunt Ammunition brands. The AOS CEO, executive management team and board of directors will be announced at a later date and in advance of closing of the transaction, anticipated to close during calendar 2023.

The company expects to create these companies through a tax-free spin-off by Ammo of AOS.

Strategic Benefits to Spin-Off
The company believes there are a number of reasons supporting the separation of the two businessed, including:

  • Investment opportunities from each business model. As independent and separate companies, Ammo expects each will be better situated to be appropriately valued by the market.
  • The separation and renewed focus by each newly organized business is expected to enhance and expand the brand strength in both separate operational units, further supporting increased enterprise and shareholder value.
  • With separated business models and short- and long-term goals, each company will be better positioned to refine and focus capital allocation strategies moving forward.
  • AOS will build on Ammo’s well-established track record as an attractive acquirer through M&A work in the outdoor recreation marketplace, allowing it to secure partnerships with other manufacturers. Similarly, Outdoor Online will be best positioned to focus on continuing the work designed to leverage its leading marketplace, while focusing on potential accretive M&A opportunities specific to its space and market.
  • Each company’s short- and long-term objectives will be enhanced by a renewed ability to attract and retain top industry talent best situated for each business’ operation separate operational and financial objectives.
  • Financial and human capital resources will be used in a focused manner to support the operational needs and growth drivers of each separate company.

“Ammo’s management team and Board completed a detailed analysis and assessment of our operations, business units and growth opportunities, all with the singular goal of unlocking and enhancing shareholder value,” said Wagenhals. “With the supportive analysis of our trusted advisory teams, we determined that a spin-off of our ammunition/munition components business would best serve to unlock significant shareholder value.

“With the opening of Ammo’s new state-of-the-art manufacturing plant in Manitowoc, WI, and the enhancement of the integrated GunBroker.com Marketplace operations following the 2021 acquisition, the management team, Board and our advisors believe the time is right to deploy this exciting strategy. Through the acquisition, enhanced efficiencies and a continually refined application of leverage, we have made great progress executing on our long-planned strategy to vertical integrate, drive operational efficiencies, expand the Marketplace and ultimately deliver shareholder value.

“Our entire team remains singularly focused and committed to working collectively through this transformational process to best position each company with the right team members and full panoply of resources to deliver exceptional products, innovation, and an overall enhanced experience for the outdoor sporting and shooting enthusiast that ultimately creates even more value for our loyal shareholders.

“As the Ammo team and its advisors work through this transformational process, further public communications will follow which will identify the exceptional stewards appointed to the boards of directors of each company, along with the management teams strategically selected from the current Ammo management team. The management teams will be enhanced with new additions from industry-leading executives with stellar resumes currently performing exceptionally well within the domestic and/or international business markets,” concluded Wagenhals.

Following the spin-off, AOS, a U.S. based ammunition and munition components manufacturer, will ramp up operation within its new plant located in Manitowoc, WI. Through scaled-up operations, the newly formed company plans to incrementally expand production to approximately one billion loaded rounds of ammunition to support the manufacture and sale of its patented Streak Visual Ammunition (Red & Green), /stelTH/ subsonic munitions and specialty rounds for military and law enforcement use via government programs.

AOS will be best situated to enhance operational efficiencies via the new plant as it drives growth and cash flow through leveraging Ammo’s profound customer relationships and operational expertise. Ammo’s analysis of the separation of these distinct business units on a go-forward pro forma basis results in projected 2023 AOS Fiscal Year guidance of $230 million to $240 million in revenue and $57 million to $60 million in Adjusted EBITDA. This transformational plan and relocation into the new plant will also best position the company to support its military program partners with products requested by component groups within the U.S. Special Forces and its ally partners, manufactured to tolerance and produced at the necessary volume. The resulting company will also be situated to support Ammo’s international customers, both commercial and governmental.

Fred Wagenhals will serve as the Chairman. The company will announce the appointment of the AOS CEO Officer and management team members at a later date. The AOS corporate operations will remain headquartered in Scottsdale, AZ with manufacturing operations based in Manitowoc, WI.

About Outdoor Online, Inc.
Ammo acquired GunBroker.com, its subsidiaries and its online marketplace in April 2021. The business has maintained its position as Ammo has worked to enhance customer service and the buyer experience, while leveraging the site with increased offerings. Following the spin-off, Outdoor Online will hold and operate the GunBroker.com online marketplace and related business assets and operations.

Ammo’s analysis of the separation of this business unit on a go-forward pro forma basis results in projected 2023 Outdoor Online Fiscal Year guidance of approximately $70 million in revenue, $51 million in Adjusted EBITDA, with plans to further leverage the marketplace through augmentation of the platform to drive growth and profitability.

Fred Wagenhals will serve as the Outdoor Online chairman and CEO following the spin-off. The company will announce the management team at a later date which management team will be comprised of select current Ammo executives and industry leaders currently engaged within the space and also announce the headquarters’ location.

Details of the Spin-Off
Ammo anticipates the transaction will be in the form of a dividend distribution to its shareholders of 100 percent of the stock of AOS, which will become a new, independent publicly traded company. The distribution is intended to be tax-free to both companies and its shareholders for U.S. federal income tax purposes. Concurrently, Ammo will change its name to Outdoor Online and will operate under a new ticker symbol.

Ammo anticipates the transaction will be completed in the 2023 calendar year, subject to final approval by the company’s Board of Directors, a Form 10 registration statement being declared effective by the U.S. Securities and Exchange Commission, regulatory approvals, and satisfaction of other standard and necessary terms and conditions. 

Lucosky Brookman LLP is acting as legal advisor to the company.