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LATEST INDUSTRY INSIDER WATER COOLER RUMORS
5/18/2010
While some 72,000 NRA members enjoyed a grand time of browsing the many guns and accessories on display at last week’s NRA Annual Meetings & Exhibits in Charlotte, N.C., the Insider was hanging out at the water cooler. I corralled some of my best industry contacts and caught up on the latest inside gossip.
The best tid-bit concerns The Freedom Group, the umbrella organization under which private equity group Cerberus Capital Management has bought numerous companies in the shooting industry in the past four years including Remington Arms, DPMS, Bushmaster, Marlin and H&R 1871.
t’s long been an open secret that Cerberus, one of the largest private equity funds in the U.S. with approximately $24 billion in holdings, has been wanting to buy a handgun company to complement its long gun-dominated stable of gun companies. A lot of rumors swirled when it was reported that Freedom Group was sniffing around HK, that they made an overture to Para USA and even poked around at Smith & Wesson. Unconfirmed rumors but with that much smoke, something’s got to be burning.
The latest bombshell is that Freedom Group is supposed to be buying Glock. While at first blush this might seem preposterous, I have a couple of reasons to suspect that the grapevine is pulsing true. First, Dr. Gaston Glock, who is approaching 80, is in failing health and might be logically looking at how to best manage Glock Inc., for estate planning.
Anything is for sale at the right price, and Freedom Group is one of the few entities that could write a check to Dr. Glock at whatever the price might be. (Somewhere in the $600 million neighborhood, I would guess.) As long as I’m on the subject of Freedom Group, the Insider picked up another juicy item. Last month, in April, the private equity company bought DynCorp, one of the leading military contractors in the private security industry.
Changing gears, another of my insider sources told me that L3 Communications has formed an umbrella division not unlike The Freedom Group. It’s called the Warrior Systems Group and includes EOTech, EOS (formerly Litton, a manufacturer of night vision devices) and its latest acquisition, Insight Technology. L3 bought Insight, a leading manufacturer of infrared lasers and other tactical products, for a reported $600 million.
L3 Communications has annual sales of approximately $14 billion, which puts it in the same league as the third Big Dog on the shooting industry porch, ATK. The annual revenue for Freedom Group is unknown because it’s a private company, unlike L3 and ATK.
So there you go, the latest from the water cooler in Charlotte and the rousing good time had by all at the 2010 NRA Annual Meetings & Exhibits.
John
