April 17th, 2010

Freedom Group Files for Public Offering This Year

Want to own a piece of Remington? And throw in Bushmaster, Marlin, DPMS, H&R and EOTAC for good measure? Well you may have your chance later this year. The Freedom Group, a holding company owned by Cerberus Capital Management, is planning to “go public”. Last fall, the Freedom Group filed a preliminary S-1 prospectus with the SEC. This launched the process of regulatory approvals needed for a Freedom Group public offering. Three weeks ago, the Freedom Group filed an amended S-1 in preparation for an IPO in the second half of 2010.

We’ve all been watching the Freedom Group gobble up one firearms-maker after another over the past few years, building the colossus of the gun industry. (See Acquisition Timeline.) Now the Freedom Group claims to be “the largest manufacturer of commercial firearms and ammunition” in the world. The Freedom Group conglomerate includes more than a dozen leading brands: Advanced Armament, Barnes Bullets, Bushmaster Firearms, Dakota Arms (including Miller Arms and Nesika), DPMS/Panther Arms, EOTAC, INTC, Marlin (including H&R, New England Firearms and L.C. Smith), and Remington Arms. With its series of acquisitions (most recently Advanced Armament and Barnes), the Freedom Group has become a dominant player in the Shooting Sports and Security Industries. In its SEC Filings, the Freedom group declared $54.5 million in net income on $848.7 million in net sales.

When will the Freedom Group launch its IPO and how much will shares cost? That information has not yet been revealed, but documents filed so far definitely point to a public offering sometime this year. Will buying shares in the Freedom Group prove a good investment? Well if you had bought gun company stocks immediately after the November 2008 election you could have tripled your money. However, some experts say Cerberus’ decision to take the Freedom Group public indicates that the “blush is off the rose” and the gun industry may be facing lean times ahead, with reduced profit potential and slower growth. For cynics, the IPO announcement confirms that Cerberus plans to “take the money and run” — disposing of the Freedom Group before its profitability declines.

CLICK HERE to download Freedom Group S-1 SEC Filing (3rd Amend.)

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