MRCA was set up as a special purpose vehicle to purchase an arms manufacturing business.
Sellers Terms are:
1. Buyer is looking for $125M + in liquid or liquidable assets); and
2. Overall $200m cash at close with a total value of $230m).
Location
•Company is based on the East Coast in a gun friendly state. My opinion is Florida.
Ownership Structure
•There are 3 owners of the current company, one of whom is the CEO. CEO is willing to stay on post sale for a defined period of time. The company is 50 years old, but has only been involved in arms manufacturing since 2010.
•Business today is 100% business to consumer. There are no military sales either domestic or foreign at the moment. No sales to law enforcement agencies either.
•The 3 owners are looking for between $160 and $180 million at close with an overall purchase price of $230 million.
•The company currently has 350 employees, down from 500 a couple of years ago due to economics. Capacity is there to ramp back up to 500. All manufacturing is done in the US. The employees are aware of the pending sale.
Company is valued as follows :
Building - $20 million
Business - $210 million
Total - $230 million
Sales Overview
• Firm's total sales are typically 70.0% to individual buyers and 30.0% to dealers, and SAM does not sell to distributors.
•The Company had a large jump in sales revenue from 2019 to 2020-2021 with a softening in 2022. Theincrease and subsequent decrease was more pronounced for dealer sales compared to individual sales asdealers built over-purchased inventory to meet the surge in demand from COVID-19 and the uncertainty stemming from the 2020 election.
•2023 is projected to be near $75.3mm in total sales, and Company expects strong growth in 2024 and 2025. The main factors for growth in 2024 are new firearms / models, sales through an affiliated marketing program, anincrease in firearm demand, and additional sales from its new website.
•Estimated individual sales grew around 50 percent from 2019 to 2020 and remained flat from 2020 to 2021. Dealer sales grew an estimated 430 percent from 2019 to 2020 and remained relatively flat from 2020 to 2021. While both individual and dealer sales dropped in 2022 and 2023, the drop was more dramatic for dealer sales.
•Starting from 2023, the total sales are expected to grow by around 50% from 2023 to 2024 and further byaround 27% from 2024 to 2025 for both individual and dealer sales.
Additional financial information is available to interested parties.
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