{"id":112472,"date":"2021-02-12T00:58:42","date_gmt":"2021-02-12T00:58:42","guid":{"rendered":"https:\/\/precoinnews.com\/?p=112472"},"modified":"2021-02-12T00:58:42","modified_gmt":"2021-02-12T00:58:42","slug":"corrected-official-czech-gunmaker-czg-buys-colt-in-cash-and-stock-deal","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/corrected-official-czech-gunmaker-czg-buys-colt-in-cash-and-stock-deal\/","title":{"rendered":"CORRECTED-(OFFICIAL)-Czech gunmaker CZG buys Colt in cash and stock deal"},"content":{"rendered":"
(Corrects after company clarifies combined revenue of $500 mln seen, not $600 mln, in 4th paragraph)<\/p>\n
PRAGUE, Feb 11 (Reuters) – CZG-Ceska Zbrojovka Group said on Thursday it would acquire group Colt Holding Company for $220 million and CZG shares as the Czech gunmaker expands in the larger U.S. market.<\/p>\n
CZG, whose firearms include CZ (Ceska Zbrojovka), Dan Wesson and Brno Rifles, is active already in the United States and building a factory in Little Rock, Arkansas.<\/p>\n
The Czech group said it would acquire 100% in Colt Holding, the parent of Colt\u2019s Manufacturing Company and a Canadian subsidiary, for the cash consideration and 1.099 million pieces of newly issued CZG stock.<\/p>\n
The combined group would have revenue of more than $500 million, CZG said. CZG shares closed up at 360 crown on Thursday, valuing the stock portion of the deal at around 395.5 million crowns ($18.65 million).<\/p>\n
There was also a potential consideration of another 1.099 million shares if EBITDA targets were met in 2021-2023, CZG said.<\/p>\n
It expected the deal for Colt, a brand with a 175-year history, which emerged from bankruptcy in 2016, to close in the second quarter.<\/p>\n
It would be financed from CZG\u2019s cash including proceeds from a recent share offering and a potential bond issuance.<\/p>\n
\u201cWith this strategic move, CZG will acquire significant production capacity in the United States and Canada and substantially expand its global customer base,\u201d CZG said, adding Colt was a traditional supplier to military and law enforcement, a target customer group for the Czech group.<\/p>\n
CZG closed an initial public offering in Prague in October although the deal was met with subdued demand, raising 812 million crowns, less than a fifth of its aim.<\/p>\n
CZG shares closed Thursday above an IPO price of 290 crowns. With 32.64 shares, CZG had a market capitalisation of 11.75 billion crowns ($554.09 million).<\/p>\n
The gunmaker posted record revenue of 5.0 billion crowns in the first nine months of 2020, a rise of 10% fuelled largely by sales growth in the U.S. market.<\/p>\n