CLAYTON, Mo., Jan. 21, 2025 /PRNewswire/ – Olin Corporation (NYSE: OLN) (‘Olin’) today announced it has entered into a definitive agreement with AMMO, Inc. (NASDAQ: POWW) (‘AMMO’) whereby Olin will acquire AMMO’s small caliber ammunition manufacturing assets for a purchase price of $75 million. The transaction will be funded through available liquidity. The assets will become part of Olin’s Winchester Ammunition business.
The acquisition includes AMMO’s brass shellcase capabilities and their world-class, 185,000 square foot production facility located in Manitowoc, Wisconsin, constructed in 2022. The Manitowoc facility and its employees will complement Winchester’s existing production capabilities, enabling greater specialization and broader participation across high-margin specialty calibers. Once fully integrated with Winchester’s industry-leading economies of scale and integration across the commercial ammunition value chain - from raw material sourcing, to projectiles, primers, and loading capabilities - the acquisition is anticipated to yield realized synergies of $40 million.
“The Manitowoc assets will extend Winchester’s leadership position and expand the reach and value of our near full integration,” said Brett Flaugher, President of Winchester Ammunition. “The acquired assets will enable our legacy plants to lower costs of existing high-volume products and increase our ability to participate in higher margin specialty rounds at a cost advantage.”
Ken Lane, Olin’s President and CEO, remarked, “As highlighted during our recent Investor Day, this investment continues the Winchester acquisition strategy, which began with our White Flyer acquisition in 2023, to identify and secure small bolt-on opportunities that are highly strategic and immediately accretive to Olin. We expect the Manitowoc assets to generate $15 million to $20 million of incremental adjusted EBITDA in the first year and, by the third year, we expect to have paid less than two times adjusted EBITDA.”
The transaction is subject to customary terms and closing conditions and is expected to close in the second quarter of 2025. …
Consolidation of manufacturing rarely ends up being a good thing for consumers.
Less competition equals higher prices and makes it easer for the government to take up all the manufacturing resources.
I cant figure all this. Unless greed is really bad in the industry.
A good amount of manufactures have had a really hard time staying open and profitable when the last 15 or so years there have been massive runs of ammo by consumers.
Overview: AMMO, Inc. designs, produces, and markets ammunition and related products for various customers including sports shooters, hunters, and law enforcement agencies with a market cap of $125.88 million.
Operations: The company’s revenue is derived from two main segments: Ammunition, generating $89.44 million, and Marketplace, contributing $52.31 million.
Market Cap: $125.88M
AMMO, Inc. faces challenges as it works to regain compliance with Nasdaq listing requirements due to delayed SEC filings amid an ongoing investigation. Despite being unprofitable, the company maintains a strong liquidity position with short-term assets of US$134 million exceeding liabilities and more cash than total debt. While AMMO has reduced its debt-to-equity ratio significantly over five years, it remains embroiled in legal issues, including a class action lawsuit alleging inadequate financial disclosures. Investors should note the company’s stable weekly volatility and sufficient cash runway extending beyond three years despite current profitability concerns.
More interesting news. I didn’t know “Ammo Inc” was Gunbroker.com!
By Chris Wack
Ammo Inc. shares were up 3.3% to $1.55 in premarket trading after the company said it is selling its ammunition-manufacturing assets to Olin Winchester, a subsidiary of Olin, for total cash consideration of $75 million.
The owner of GunBroker.com said the deal is the result of a strategic-review process during which it worked with independent advisors to engage with an array of prospective buyers.
Upon completion of the transaction, the Scottsdale, Ariz.-based company expects to focus on prioritizing its profitable, high-margin GunBroker.com marketplace, Ammo said.
The disposition will include Ammo’s 185,000-square-foot production facility and ballistic range in Manitowoc, Wis.
The closing of the transaction is expected to be completed in the second calendar quarter of 2025, said the company.
Ammo said it will undertake a rebranding process and complete a corporate name change upon the closing.