by Companies in the Czech Republic certainly have been making some moves in the last couple of months. This includes both Czechoslovak Group a.s. (CSG) and Colt CZ Groupe SE.
First was the Czechoslovak Group (CSG) agreeing to purchase Vista Outdoor’s Sporting Products group. The Sporting Products group are the ammunition, smokeless powder, and components group of Vista Outdoor. As I reported earlier, the Sporting Products groups was going to be renamed The Kinetic Group and be an independent company by the end of 2023. Then, in mid-October, Vista Outdoor changed plans and announced they agreed to sell the Sporting Products group to Czechoslovak Group (CSG) for $1.91 billion.
Last week on the 12th of December, the deal received anti-trust clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. While the deal still must get other governmental approvals before it can close, this was a major hurdle.
In the interim between the announcement that Czechoslovak Groups was purchasing the Sporting Products group and the anti-trust clearance, another Czech company, Colt CZ Groupe SE, proposed a merger with Vista Outdoor for the entirety of the company. This was on November 22nd. The combined cash and stock transaction was valued at $30 per share of Vista Outdoor common stock.
Vista Outdoor’s board of directors after consulting with their financial and legal advisors rejected the unsolicited bid from Colt CZ Groupe SE on November 29th. Among the reasons for rejecting this unsolicited bid was that it undervalued Vista Outdoor, that it didn’t provide adequate detail with which to measure the $30 per share offer, and that it didn’t provide the details of the debt and equity financing needed to complete the deal nor whether any binding commitments had been obtained.
Czechoslovak Group was not finished with their acquisitions. On Friday, December 15th, they announced they had purchased a majority stake in family-owned fine shotgun makers Armi Perazzi S.p.A. While terms were not announced, CSG will own 80% of the company while the Perazzi siblings will retain 20%. The company will continue to be managed by the Perazzi family and the current management team.
Michal Strnad, owner and CEO of CSG, said on the acquistion:
Armi Perazzi is a prestigious brand in the field of firearms for sport shooters and elite hunters. At the same time, it is a stable and prosperous company that the Perazzi family excellently manages. The motivation for this acquisition is not only financial but also to strengthen CSG’s international prestige and reputation as a global and innovative industrial group expanding in Europe and the USA.
Today, Colt CZ Group SE announced that they had agreed to purchase 100% of Czech ammunition company Sellier & Bellot in a combined cash and stock transaction from CBC Europe S.à r.l. (“CBC”). In addition to $350 million in cash, CBC will get approximately 27-28% of new issue Colt CZ common stock. Colt CZ with use existing cash and debt financing for the transaction which will close in the first half of 2024.
Jan Drahota, CEO of Colt CZ, had this to say on the acquistion:
“We are proud to welcome one of the oldest and most important producers of small caliber ammunition, Sellier & Bellot, to Colt CZ Group. This acquisition fits into our long-term strategy to expand not only in our core segment of small arms, but also in related areas, with ammunition being a natural complement to our products.
CBC Global Ammunition, in addition to Sellier & Bellot, owns Magtech, CBC Brazil, and MEN Germany. Magtech will continue to serve as the US distributor for Sellier & Bellot after the sale to Colt CZ. Fabio Mazzaro, CFO for CBC Global Ammunition, calls this the “starting point of an impactful strategic collaboration.” He went on to add that they were convinced of Colt CZ’s long term vision and that this transaction will lead to “remarkable value creation between the ammunition and firearms segments.“
To sum up, Czechoslovak Group (CSG) will be acquiring both Vista Outdoor’s Sporting Products group and a majority stake in Perazzi shotguns. Meanwhile, Colt CZ Groupe will be buying Czech ammunition maker Sellier & Bellot.
