The Czech-based parent company of CZ and Connecticut’s Colt have come to an agreement, leaving the European gunmaker increasingly American.
Announced on Thursday, the Česká zbrojovka Group, or CZG, will acquire a 100-percent stake in the historic Colt’s Manufacturing Company as well as its Canadian subsidiary, the Colt Canada Corporation. CZG has agreed to a cash and stock deal that includes $220 million upfront and the issue of just over 1 million shares of newly issued common stock. The combined group will have annual projected revenues of over $500 million.
The heads of both companies painted the merger as a strategic step in which both stand to make great gains as brands.
“The acquisition of Colt, an iconic brand and a benchmark for the military, law enforcement, and commercial markets globally, fits perfectly in our strategy to become the leader in the firearms manufacturing industry and a key partner for the armed forces,” said Lubomír Kovařík, president and chairman of CZG.
Colt in recent years emerged from Chapter 11 bankruptcy after the loss of its key military M4 contract in 2013, emerging from restructuring in January 2016. Since then, it has gained several new military contracts, so many that it had to briefly suspend commercial AR-15 sales, and has re-entered the revolver market with a bang.
“We are very pleased with the prospect of such a strategic combination,” said Dennis Veilleux, president and CEO of Colt. “Having completed a historic turn-around of the operations and financial performance at Colt over the past five years, this important next step with CZG positions the company to take advantage of significant growth opportunities. We are excited to join forces with CZG which will be a powerful combination for both brands and for our customers.”
According to figures from federal regulators, Colt in 2019, the latest year that data is available, produced 29,022 pistols, 21,049 revolvers, and 10,091 rifles. Colt’s sole U.S. factory is in West Hartford, Connecticut. Colt Canada is in Kitchener, Ontario, and produces M4-style carbines and FN MAG general-purpose machine guns for not only the Canadian military but also for several other NATO countries.
As for CZG, the company’s CZ-USA and Dan Wesson subsidiaries have locations in Kansas City, Kansas, and Norwich, New York. They produced 20,315 pistols, 10,565 rifles, and 58 revolvers in 2019 domestically. Two years ago, CZ-USA announced an important $90 million expansion in Arkansas, namely a 65,000-square-foot manufacturing facility to be completed on approximately 73 acres at the Port of Little Rock.
While some purists may bemoan the acquisition of an iconic American firearms brand by an overseas concern, it should be pointed out that this is not a first in history. Smith & Wesson at one time was owned by Tompkins, a British engineering firm, and the Herstal Group of Belgium – owners of FN – has long held control of both the Browning Arms Company and Winchester Repeating Arms Company. Likewise, some companies traditionally seen as European have largely transferred operations to the U.S., for example, Sig-Sauer, who shuttered its German factory last year, while its American offshoot is booming and expanding.