Smith & Wesson Parent AOBC Splits into Two Companies
American Outdoor Brands Corporation (NASDAQ: AOBC), one of the world’s leading providers of firearms and products for shooting, hunting, and outdoor enthusiasts, is splitting into two separate companies, with the Smith & Wesson gun business becoming a stand-alone enterprise again. Last week American Outdoor Brands’ Board of Directors unanimously approved a plan to spin-off its outdoor products and accessories business as a tax-free stock dividend to its stockholders. The proposed transaction, which is expected to be completed in the second half of calendar 2020, would create two independent, publicly-traded companies: Smith & Wesson Brands, Inc. (encompassing the firearm business) and American Outdoor Brands, Inc. (encompassing the outdoor products and accessories business).
READ More about Smith & Wesson Spin-Off HERE »
According to AOBC: “The purpose of the spin-off is to enable the management team of each company to focus on its specific strategies, including (1) structuring its business to take advantage of growth opportunities in its specific markets; (2) tailoring its business operation and financial model to its specific long-term strategies; and, (3) aligning its external financial resources, such as stock, access to markets, credit, and insurance factors, with its particular type of business.”
Barry M. Monheit, Chairman of the Board, said, “There have been significant changes in the political climate as well as the economic, investing, and insurance markets since we embarked upon what we believe have been our very successful diversification efforts. We believe that separating into two independent public companies will allow each company to better align its strategic objectives with its capital allocation priorities. From the standpoint of our stockholders, at the time of the spin-off, the AOBC stockholders will own 100% of each company, thereby maintaining their pre-spin interest in both companies, and will thereafter have the ability to make distinct investment decisions tailored to their particular investment profile.”
Mark Smith Will Lead Smith & Wesson After Spin-Off
Upon successful completion of the spin-off, Mark Smith will become CEO of Smith & Wesson Brands, Inc.; Smith is currently the President of the Manufacturing Services Division of AOBC and supports all of its businesses. James Debney, current AOBC President and CEO, will lead the outdoor products and accessories company as CEO after the spin-off.
The Future of Smith & Wesson Brands, Inc. (Projections)
Headquartered in Springfield, Massachusetts, Smith & Wesson Brands, Inc. will continue its 167-year-old heritage of producing firearms. This business’s handgun, long gun, and suppressor products are marketed under the Smith & Wesson®, M&P®, Performance Center®, Thompson/Center Arms™, and Gemtech® brands. The company’s financial profile is expected to yield strong cash flows and profitability with a plan to eventually return capital to stockholders in the form of dividends and stock repurchases. Assuming a spin-off in eight to ten months, Smith & Wesson Brands, Inc. is expected to generate revenue between $450 million and $500 million and adjusted EBITDAS between $90 million and $105 million in its first 12 months as an independent company.
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