by Olin Corporation, the parent company of Winchester Ammunition, announced today that they entered into an agreement with AMMO, Inc. to purchase AMMO’s small caliber ammunition manufacturing assets. The purchase price was $75 million.
From the announcement:
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.
AMMO, Inc.’s 8-K filing with the Securities and Exchange Commission notes that after the completion of the sale of their ammo business the company will continue to operate their GunBroker.com online marketplace business.
The sale of the ammunition business to Olin is scheduled to be completed in the second quarter of 2025. Ken Lane, Olin’s President and CEO, said of the purchase, “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.”
It sounds to me like Olin’s Winchester Ammunition just got themselves a bargain.
Insofar as AMMO, Inc. is concerned, their stock (POWW) closed up 12% today.
