Smith & Wesson Separates from Accessory Brands Group
This month American Outdoor Brands Corporation (NASDAQ: AOBC) will officially split into two separate companies, with the Smith & Wesson gun business becoming a stand-alone enterprise again. This action will 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). AOBC’s board of directors previously approved the separation of its outdoor products and accessories business into an independent, publicly-traded company.
Smith & Wesson Brands will effect the separation through a spin-off whereby it will distribute 100 percent of the shares of American Outdoor Brands common stock to Smith & Wesson Brands’ stockholders of record as of the close of business on the record date of August 10, 2020 on a pro rata basis. The distribution of American Outdoor Brands’ shares is expected to be completed effective as of 12:01 a.m. Eastern Time on August 24, 2020, with Smith & Wesson Brands stockholders receiving one share of American Outdoor Brands common stock for every four shares of Smith & Wesson Brands stock.
Following the spin-off, American Outdoor Brands will be a separate publicly-traded company independent from Smith & Wesson Brands. Smith & Wesson Brands will not retain any American Outdoor Brands common stock. Smith & Wesson Brands will continue to be listed on NASDAQ under the symbol SWBI. American Outdoor Brands has received approval for the listing of its common stock on NASDAQ under the symbol AOUT.
Background of the American Outdoor Brands Conglomerate
In August 2016, Smith & Wesson Holding Corporation bought Crimson Trace, a laser-sight manufacturer, for $95 million and Taylor Brands, a tool and knife maker, for $85 million. In November of that same year, the company bought UST Brands, a survival equipment maker, for $32.3 million. And Smith & Wesson acquired Battenfeld Technologies in 2015 for $130.3 million. Smith & Wesson diversified from firearms into sporting goods and accessories in hopes of insulating Smith & Wesson from the stock price volatility caused by the unpredictability of the gun business. This culminated in the decision to change the company’s name to American Outdoor Brands Corporation. However, despite the diversification, in 2017, firearms still accounted for 86% of American Outdoor Brands’s revenues.
Post-Spinoff Brand Line-Ups for SWBI and AOUT
Smith & Wesson Brands (SWBI) will now become firearm-centric, selling guns under the Smith & Wesson, M&P, Thompson/Center, and Performance Center brands. In addition, we believe SWBI will continue to make and sell Gemtech suppressors.
American Outdoor Brands markets a large number of product brands, including Bog (bipods/tripods), Caldwell (shooting accessories), Crimson Trace (weapons lights), Frankford Arsenal (reloading tools). Listed below are the product lines American Outdoor Brands Inc. will continue to sell as the new, separate AOUT company. A significant percentage of these brands remain gun-centric:
Bog — Manufactures tripods and shooting rests
Caldwell — Manufactures targets and shooting rests
Crimson Trace — Flashlight, Weapon light, and aiming device manufacturer
Frankford Arsenal — Manufactures reloading tools
Golden Rod — Manufactures dehumidifiers and moisture sensors for safes and lock boxes
Hooyman — Manufactures Landscaping tools and portable power saws
Imperial — Manufactures fixed and folding blade knives
Lockdown — Manufactures gun safes, lock boxes, gun locks, and accessories
M&P Accessories — Manufactures firearm accessories
Old Timer — Manufactures fixed and folding blade knives as well as accessories
Schrade — Manufactures fixed and folding blade knives as well as accessories
Tipton — Manufactures firearm cleaning accessories
Uncle Henry — Manufactures fixed and folding blade knives as well as accessories
Wheeler Engineering — Manufactures gunsmithing tools
Bubba — Manufactures knives, tools, and accessories for fishing
* Smith & Wesson Accessories — Manufactures firearm accessories
* Thompson/Center Accessories — Manufactures firearm accessories
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 168-year-old heritage of producing firearms (S&W was founded in 1852). 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. Following the spin-off this month, 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.
* It is not clear whether Smith & Wesson Accessories and Thompson Center Accessories will be marketed under the same name after American Outdoor brands splits into two publicly-traded companies.
