Gregory Mountain Products’ parent company, Bianchi, has been acquired by Armor Holdings Inc., a manufacturer of military, law-enforcement, and personnel safety products. Bianchi’s main products are duty and concealment holsters, belts and accessories used primarily by law-enforcement, private security and military personnel. Bianchi and Gregory are currently owned by Huntington Holdings, a private equity firm based in Los Angeles. The deal is expected to close during the fourth quarter, probably in mid-December.

The combined Bianchi and Gregory brands reported $36 million in revenues for the twelve months preceding September 30, 2004. Armor Holdings is purchasing the company for $60 million in cash, or 1.7x sales. Most deals in this industry average six to eight times EBITDA. On the extreme high end of this range, that puts Bianchi’s EBITDA at over 20%, leading us to believe that AH paid a considerable premium for the company.

Bianchi acquired Gregory from the brand’s founder Wayne Gregory in 1985, and two years later Huntington acquired Bianchi. According to Huntington Holdings, the firm acquired Gregory when it had just over $1 million in revenue in 1987. Huntington now puts Gregory’s annual revenues at over $20 million. Huntington had re-purchased 75% of the Bianchi from its original investors, who reportedly cashed out with six-times their initial investment in the company.

BOSS spoke with Paul Gagner, Gregory’s VP of sales and marketing, who said that Gregory is not expecting any changes in personnel or staffing, and Gregory should continue to operate separately. Gagner does expect Gregory to become more active in military and government sales under their new owner. He also added that there will be additional resources available for product R&D, market research, and marketing. He felt like this would be a move in the right direction for Gregory, and does not foresee any changes in the company’s day-to-day operations, other that the additional resources offered by Armor Holdings.

“They (Bianchi) don’t really know anything about the outdoor industry, or the market we work in,” said Gagner. “And, to their credit, Bianchi has let us run things the way we see fit. I expect Armor will do the same.”

In a letter to employees, reps, customers and suppliers, Gary French, CEO of Bianchi, wrote, “We expect that our Gregory and Bianchi businesses will benefit significantly from all of AHI’s resources including their strong U.S. Government and International distribution network, in addition to their significant financial resources to fund future expansion.”

AHI is organized into three main divisions-The Aerospace and Defense Group, the Products Division, and the Mobile Security Division. Bianchi and Gregory will be rolled into the Products Division, which had $194 million in revenue in 2003 and $184.2 million for the third quarter YTD 2004. Both AHI and Bianchi are heavily involved in military sales, supplying the SPEAR (Special Operations Forces Personal Equipment Advanced Requirement) rucksack system to the U.S. Special Forces.

On the topic of Gregory, Schiller said “…the consumer market opportunity for the Gregory brand, which enjoys an excellent reputation amongst outdoor enthusiasts, is compelling.”