jason19711971
NES Member
By Doug Cameron Smith & Wesson Holding Corp. announced plans Tuesday to expand through acquisitions into the broader outdoor sporting goods market to reduce its reliance on volatile sales of guns and ammunition.
The largest U.S. firearms maker by revenue said in a regulatory filing that it could create up to three new divisions for outdoor products as part of a broad restructuring that would also establish a standalone manufacturing unit alongside its existing gun and shooting accessories operations.
U.S. gun sales rebounded at the end of 2015, but sales have swung wildly over the past four years as concerns over tougher ownership regulations drove buyers to stockpile weapons and ammunition, and manufacturers have struggled to match output with demand.
Smith & Wesson said it could take up to five years to identify acquisition targets in the fragmented outdoor sports market and though it didn't identify potential segments, said they would be counter-cyclical to its firearms business. It also said it would pursue deals to fill gaps in its firearms portfolio, such as shotguns, as well as manufacturers who could improve the vertical integration of its supply chain.
The plans were due to be outlined in a presentation to investors and analysts at The Shot Show, an industry trade event in Las Vegas.
The planned move into the broader outdoor sports market could intensify competition for deals with Vista Outdoor Inc., the largest ammunition maker by revenue. Vista, created last year from the merger of two defense companies, has diversified through acquisitions including the $412 million purchase of hydration specialist CamelBak Products LLC and Jimmy Smyks, a maker of paddle boards.
Vista estimates the U.S. outdoor products market is worth around $63 billion a year in sales, and has targeted segments including golf and camping.
Write to Doug Cameron at [email protected]
(END) Dow Jones Newswires
January 19, 2016 10:38 ET (15:38 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
The largest U.S. firearms maker by revenue said in a regulatory filing that it could create up to three new divisions for outdoor products as part of a broad restructuring that would also establish a standalone manufacturing unit alongside its existing gun and shooting accessories operations.
U.S. gun sales rebounded at the end of 2015, but sales have swung wildly over the past four years as concerns over tougher ownership regulations drove buyers to stockpile weapons and ammunition, and manufacturers have struggled to match output with demand.
Smith & Wesson said it could take up to five years to identify acquisition targets in the fragmented outdoor sports market and though it didn't identify potential segments, said they would be counter-cyclical to its firearms business. It also said it would pursue deals to fill gaps in its firearms portfolio, such as shotguns, as well as manufacturers who could improve the vertical integration of its supply chain.
The plans were due to be outlined in a presentation to investors and analysts at The Shot Show, an industry trade event in Las Vegas.
The planned move into the broader outdoor sports market could intensify competition for deals with Vista Outdoor Inc., the largest ammunition maker by revenue. Vista, created last year from the merger of two defense companies, has diversified through acquisitions including the $412 million purchase of hydration specialist CamelBak Products LLC and Jimmy Smyks, a maker of paddle boards.
Vista estimates the U.S. outdoor products market is worth around $63 billion a year in sales, and has targeted segments including golf and camping.
Write to Doug Cameron at [email protected]
(END) Dow Jones Newswires
January 19, 2016 10:38 ET (15:38 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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