SPRINGFIELD, Mass.,
July 25, 2016 /PRNewswire/
-- Smith & Wesson Holding Corporation (NASDAQ
Global Select: SWHC), a leading manufacturer of firearms and a
provider of quality accessory products for the shooting, hunting,
and rugged outdoor enthusiast, today announced that it has signed a
definitive agreement to acquire Crimson Trace Corporation (Crimson
Trace), the industry leader in laser sighting systems and tactical
lighting for firearms, for $95.0
million, subject to certain adjustments, utilizing cash on
hand.
Crimson Trace has long been a key supplier of laser sighting
systems for Smith & Wesson. For more than two decades,
Crimson Trace has provided consumers, military units, and law
enforcement officers around the globe with the world's largest
selection of award-winning laser sight and tactical light
products. Crimson Trace offers more than 225 products and is
widely recognized as the world's leading brand of laser sights for
firearms. Its award-winning innovations include the
Lasergrips®, Laserguard®, and Rail Master® platforms. The
company's product line also includes the Defender Series®,
Lightguard®, and its new LiNQ™ wireless activation system.
Based in Wilsonville, Oregon,
Crimson Trace operates from a 50,000 square foot, leased facility
where it engineers and manufactures its products.
Crimson Trace was founded 22 years ago and has organically
generated a ten year compound annual revenue growth rate in excess
of 10%. The company maintains a product development team that
has an established track record of launching high-quality,
innovative laser sighting products. As a result, its products
maintain a premium position with hundreds of independent retailers
as well as large sporting goods retailers, including Cabela's,
MidwayUSA, Nation's Best Sports, and internet retailer Optics
Planet, Inc.
James Debney, Smith &
Wesson President and Chief Executive
Officer, said, "Crimson Trace provides us with an exceptional
opportunity to acquire a thriving company that is completely
aligned with our strategy to become a leader in the market for
shooting, hunting, and rugged outdoor enthusiasts. As the
undisputed leader in the market for laser sighting products,
Crimson Trace serves as an ideal platform for our new
Electro-Optics Division. Firearms purchasers frequently buy
electro-optic accessories to enhance the capabilities and
performance of their firearms. The growth that Crimson Trace
has delivered is a testament to the high product quality and the
robust product development capability that Lane Tobiassen, President and Chief Executive
Officer of Crimson Trace, and his team have established. That
capability, combined with Crimson Trace's leadership position in
the market for laser sights, provides a solid framework for organic
and inorganic growth."
Lane Tobiassen, who joined
Crimson Trace in 2005, will serve as President of the new
Electro-Optics Division of Smith & Wesson, and will report
directly to Debney. The Crimson Trace management team and
workforce, as well as its base of operations, will remain in
Wilsonville, Oregon after the
acquisition.
Tobiassen said, "It is a great honor to lead Crimson Trace into
this exciting new chapter in our history by joining the Smith &
Wesson team. Since 1994, we have designed and brought to
market more than 225 products, all of which reflect the passion,
dedication, and spirit of innovation of our design engineers,
production workforce, customer service representatives, and
marketing and sales professionals. As the new Electro-Optics
Division of Smith & Wesson, we believe that our capabilities,
combined with inorganic opportunities to acquire related
technologies, will expand the reach of our existing market
footprint. This makes us a great fit for Smith & Wesson,
a legendary company with an iconic brand, world-class products, and
markets that include consumer, law enforcement, and international
channels. We look forward to offering consumers exceptional
performance from two of the industry's most trusted names."
Smith & Wesson will purchase all of the outstanding stock of
Crimson Trace for $95.0 million,
using existing cash balances. Crimson Trace is being acquired
from Crimson Trace Holdings, LLC, which is owned by private equity
firms Peninsula Capital Partners, LLC and VergePointe Capital, LLC;
Lewis Danielson, the founder and
Chairman of the Board of Crimson Trace; a small group of minority
members; and certain members of management.
Jeffrey D. Buchanan, Executive
Vice President and Chief Financial Officer of Smith & Wesson,
stated, "As a result of our strong balance sheet, we intend to
complete the purchase of Crimson Trace with cash on hand and we
expect the transaction to close in three to six weeks. After the
closing date, we expect the acquisition to be accretive to Smith
& Wesson's earnings per share in fiscal 2017. Due to its
anticipated timing, the transaction is expected to have no impact
on Smith & Wesson's operational and financial results for the
fiscal 2017 first quarter ending July
31, 2016. As of the date of signing, Crimson Trace's
trailing 12 month revenue was approximately $44.0 million, of which approximately 25% was
revenue from Smith & Wesson and would be excluded from our
consolidated revenue. The purchase price represents an
estimated multiple of approximately 5.9x the trailing 12 month
adjusted EBITDAS of Crimson Trace. We look forward to
providing additional details following the close of the
transaction."
Cowen and Company, LLC is acting as exclusive financial advisor
and Greenberg Traurig, LLP is acting as legal advisor to Smith
& Wesson and its Board of Directors. Robert W. Baird
& Co. is acting as exclusive financial advisor and K&L
Gates LLP is acting as legal advisor to Crimson Trace and its
owners.
About Smith & Wesson
Smith & Wesson Holding Corporation (NASDAQ Global Select:
SWHC) is a leading manufacturer of firearms and a provider of
quality accessory products for the shooting, hunting, and rugged
outdoor enthusiast, delivering a broad portfolio of quality
firearms and shooting, hunting, and outdoor accessories, to
the global consumer and professional markets. The company's
firearms division brands include Smith & Wesson®, M&P®, and
Thompson/Center Arms™. As a leading provider of shooting, hunting,
and outdoor accessories, including reloading, gunsmithing, gun
cleaning supplies, tree saws, and vault accessories, the company's
accessories division produces innovative, high-quality products
under several brands, including Caldwell® Shooting Supplies,
Wheeler® Engineering, Tipton® Gun Cleaning Supplies, Frankford
Arsenal® Reloading Tools, Lockdown® Vault Accessories, Hooyman®
Premium Tree Saws, BOG POD®, and Golden Rod® Moisture Control. The
company's manufacturing services division provides forging,
machining, and precision plastic service for outside businesses.
Smith & Wesson facilities are located in Massachusetts, Maine, Connecticut, and Missouri. For more information on Smith &
Wesson, call (800) 331-0852 or log on to www.smith-wesson.com.
Safe Harbor Statement
Certain statements contained in this press release may be deemed
to be forward-looking statements under federal securities laws, and
we intend that such forward-looking statements be subject to the
safe-harbor created thereby. Such forward-looking statements
include the timing and completion of our acquisition of Crimson
Trace; our belief that Crimson Trace provides us with an
exceptional opportunity to acquire a thriving company that is
completely aligned with our strategy to become a leader in the
market for shooting, hunting, and rugged outdoor enthusiasts; our
belief that Crimson Trace serves as an ideal platform for our new
Electro-Optics Division; our belief that Crimson Trace's robust
product development capability, combined with its leadership
position in the market for laser sights, provides a solid framework
for organic and inorganic growth; our planned financing of the
acquisition; our expectation regarding the effects of the
acquisition on earnings per share in fiscal 2017; and our
expectation that the transaction is expected to have no impact on
our operational and financial results for the fiscal 2017 first
quarter ending July 31, 2016.
We caution that these statements are qualified by important factors
that could cause actual results to differ materially from those
reflected by such forward-looking statements. Such factors
include the demand for our products; the costs and ultimate
conclusion of certain legal matters; the state of the U.S. economy
in general and the firearm industry in particular; general economic
conditions and consumer spending patterns; the potential for
increased regulation of firearms and firearm-related products;
speculation surrounding fears of terrorism and crime; our growth
opportunities; our anticipated growth; our ability to increase
demand for our products in various markets, including consumer, law
enforcement, and military channels, domestically and
internationally; the position of our hunting products in the
consumer discretionary marketplace and distribution channel; our
penetration rates in new and existing markets; our strategies; our
ability to introduce new products; the success of new products; our
ability to expand our markets; our ability to integrate acquired
businesses in a successful manner; the general growth of our
firearm accessories business; the potential for cancellation of
orders from our backlog; and other risks detailed from time to time
in our reports filed with the SEC, including our Annual Report on
Form 10-K for the fiscal year ended April
30, 2016.
(In this press release, EBITDAS refers to Earnings Before
Interest, Taxes, Depreciation, Amortization, and Stock-based
compensation.)
Contact: Liz Sharp, VP
Investor Relations
Smith & Wesson Holding Corp.
(413) 747-6284
lsharp@smith-wesson.com
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SOURCE Smith & Wesson Holding Corporation