Cerberus Will Sell Off Freedom Group Companies
Cerberus Capital Management, LP (Cerberus), announced today that it would sell its stake in Freedom Group, Inc. (Freedom Group), a holding company that owns numerous firearms-industry businesses. The Freedom Group Family of Companies includes Remington, Bushmaster, Marlin, H&R, DPMS, Barnes Bullets, Eotac, and Dakota Arms. A Bushmaster AR15-type rifle was one of the weapons found at the scene of the Newtown, Connecticut shootings. Adam Lanza, the 20-year-old shooter, also carried Glock and Sig Sauer pistols.
In deciding to sell the Freedom Group, Cerberus was influenced by its large institutional investors. The California State Teachers’ Retirement System, which has over $700 million invested in Cerberus, stated that it was re-examining its Cerberus investment in light of recent events. Translation: After Newtown, this big pension fund was very uncomfortable with the fact that Cerberus was so heavily involved in the gun business (through its ownership of the Freedom Group and specifically Bushmaster).
Here is the text of the Press Release issued by Cerberus on December 18, 2012:
We were shocked and deeply saddened by the events that took place at the Sandy Hook Elementary School in Newtown, CT on December 14, 2012. We cannot comprehend the losses suffered by the families and friends of those killed by the unthinkable crimes committed that day. No words or actions can lessen the enormity of this event or make a dent in the pain that was inflicted on so many.
In 2006 affiliates of Cerberus Capital Management, L.P. made a financial investment in Freedom Group. Freedom Group does not sell weapons or ammunition directly to consumers, through gun shows or otherwise. Sales are made only to federally licensed firearms dealers and distributors in accordance with applicable laws and regulations. We do not believe that Freedom Group or any single company or individual can prevent senseless violence or the illegal use or procurement of firearms and ammunition.
It is apparent that the Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level. The debate essentially focuses on the balance between public safety and the scope of the Constitutional rights under the Second Amendment. As a Firm, we are investors, not statesmen or policy makers. Our role is to make investments on behalf of our clients who are comprised of the pension plans of firemen, teachers, policemen and other municipal workers and unions, endowments, and other institutions and individuals. It is not our role to take positions, or attempt to shape or influence the gun control policy debate. That is the job of our federal and state legislators.
There are, however, actions that we as a firm can take. Accordingly, we have determined to immediately engage in a formal process to sell our investment in Freedom Group. We will retain a financial advisor to design and execute a process to sell our interests in Freedom Group, and we will then return that capital to our investors. We believe that this decision allows us to meet our obligations to the investors whose interests we are entrusted to protect without being drawn into the national debate that is more properly pursued by those with the formal charter and public responsibility to do so.
Our thoughts and prayers are with the families and communities impacted by this tragic and devastating event.
Cerberus Capital Management, L.P.
About Cerberus Capital Management: A private equity firm established in 1992, Cerberus Capital Management, L.P. has more than US $20 billion under management invested in four primary strategies: distressed securities & assets; control and non-control private equity; commercial mid-market lending and real estate-related investments.
Read Related Chicago Tribune Article about Freedom Group Divestiture.
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Tags: Adam Lanza, California Teachers Retirement Fund, Cerberus, Cerberus Capital Management, Freedom Group Inc., Newtown, School, Wall Street
Dick’s Sporting Goods Inc., one of the largest gun outlets in the U.S., said that it has removed all guns from its store nearest Friday’s mass shooting and also “suspended the sale of modern sporting rifles in all of our stores chainwide.” The company said it was acting “out of respect for the victims and their families, during this time of national mourning.”
Wal-Mart Stores Inc., WMT +0.29% the largest seller of guns and ammunition in the U.S., on Monday removed a website listing for a semiautomatic assault rifle similar to the gun used in the school massacre
The rats are jumping off the ship. Good riddance.
NEW YORK (MarketWatch) — The California State Teachers’ Retirement Sytem, or Calstrs, said Tuesday it owns 2.4% of the Freedom Group, the gun holding company being sold by private equity firm Cerberus Capital Management. Freedom Group makes Bushmaster rifles, along with Remington, Marlin and other brands. A Bushmaster weapon was among those used in Friday’s fatal shooting of 20 school children in Newtown, Conn. Going foward, Calstrs said it will “work to ensure that all of our investments” take into account a vetting process it adopted in 2008. Calstrs said after the shootings, “our investments staff…initiated discussions with Cerberus about the facts surrounding the investments.” Early Tuesday, Cerberus said it planned to sell its stake in the Freedom Group. Calstrs said its stake in the Freedom Group, is “not 6.67% as reported by some media outlets.”
I find it interesting that a teachers union had a stake in all of this when they are totally against the industry in the first place,however if money is to be made I guess secretly it is ok.
Anyone want to pick up some manufacturing companies cheap…?
Both Smith and Wesson and Ruger are down 1/3 since the shooting. Could offer value here.
Smith & Wesson Holding Corporation (SWHC) 7.79 0.87(9.99%)down from 11.00
Sturm, Ruger & Co. Inc. (RGR)
40.60 3.40(7.73%)down from 60.00
just goes to show you how ignorant people are. they think banning assault rifles will protect them from future tradgedies as this. if they think a criminal would pick one law to abide by and choose the gun law then they are just plain ignorant.
semi auto or single shot, doesn’t matter, had the guy walked in with a single shot 22 and a pocket full of bullets he could have done the same damage because there wasn’t anybody armed to defend the people.
they didn’t ban cell phones when they prooved texting was a major cause of traffic accidents/fatalities, they just banned the use in certain areas.
nut cases out there are gonna kill no matter the type of weapon they choose, thats what people need to realize and that they should be able to protect themselves and others around without a law restricting them from doing so.
Nice rally today in both stocks,
SWHC 8.51
+9.26%
RGR 42.98
+5.86%