Czech-based firearms maker Colt CZ Group SE has agreed to acquire a majority stake and potentially all of the shares in Synthesia Nitrocellulose, a Czech manufacturer of gunpowder ingredients. The deal values Synthesia Nitrocellulose at CZK 22 billion ($1.05 billion).
Colt CZ, which also has operations in the United States, Canada, Sweden, Switzerland, and Hungary, said the deal with privately owned chemicals group Synthesia would help secure its supply chain and facilitate expansion into larger calibers, which are in high demand amid Europe’s rearmament drive.
Under the terms of the deal, Colt CZ will acquire a 51 percent stake in Synthesia Nitrocellulose from its parent company, Kaprain Chemical Limited, with the remaining 49 percent to be acquired under already agreed-upon terms in the medium term.
Synthesia Nitrocellulose was founded in December 2024 through a spin-off of Synthesia’s nitrocellulose manufacturing division, one of the largest energetic nitrocellulose manufacturers in Europe and North America. Energetic nitrocellulose is a basic raw material to produce single and multi-component powders and propellants and a key ingredient in the production of small-, medium-, and large-caliber ammunition. Colt does not produce the material itself at this point but may aim to step into the business in the future, the company said.
The total transaction price is reported to be CZK 22 billion, based on the enterprise value, corresponding to approximately an 8.2x multiple of the expected 2025 EBITDA. The purchase price will be paid through a combination of cash and the issuance of new common shares of Colt CZ, representing approximately 40 percent of the purchase price. Upon completion of the transaction, Kaprain will become the third largest shareholder of Colt CZ. Synthesia will retain ownership of the remaining shares of Synthesia Nitrocellulose. The transaction is expected to be completed by the first quarter of 2026.
In connection with the transaction, Colt CZ Group has also agreed to acquire the energy division of Synthesia, a.s., which generates and supplies energy for the industrial complex in Semtín and Rybitví. The energy division will be spun off into a separate company first. This part of the transaction is expected to be completed in the first half of 2026 and will initially involve the acquisition of a 51 percent stake, with Colt CZ acquiring the remaining 49 percent under the already agreed terms in the medium term. The price of this transaction will be CZK 1.4 billion, based on the enterprise value, and will be paid exclusively through the issuance of new common shares of Colt CZ.
“We are proud to welcome Synthesia Nitrocellulose, one of the world’s leading suppliers of energetic nitrocellulose based in a NATO member country, to Colt CZ Group. The acquisition of SNC aligns with our strategy of expanding the Group’s activities into medium- and large-caliber ammunition, while strengthening our position in a critical element of our supply chain. We intend to continue the vertical integration of ammunition manufacturing, thereby contributing to the strategic independence and self-sufficiency of the Czech Republic and NATO countries in defense supplies,” said Jan Drahota, chairman of the board of directors of Colt CZ Group.
“We look forward to working with the management, employees, and customers of Synthesia Nitrocellulose. We appreciate the trust of the Kaprain Group, an important player in the Czech chemical industry, which will become the third largest shareholder of Colt CZ Group,” added Drahota.
“We are pleased to have found a partner in Colt CZ Group with a long-term vision in the defense industry that will support further development of Synthesia Nitrocellulose. We believe that combining the chemical know-how of Kaprain with the experience of Colt CZ in the field of ammunition will bring significant synergies throughout the supply chain. We are pleased that, as a major shareholder, we will be involved in the future development of Colt CZ Group,” said Jan Kadaník, chairman of the board of directors of Synthesia and director of Kaprain Chemical.
Image courtesy Synthesia/X
