Smith & Wesson (SWHC) to Acquire Ultimate Survival Technologies for $32.3M

November 4, 2016 8:04 AM EDT

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Smith & Wesson (NASDAQ: SWHC) announced that its Outdoor Products & Accessories segment, through a subsidiary of Battenfeld Technologies, Inc., will acquire the business of Ultimate Survival Technologies, Inc., a provider of high quality survival and camping equipment, in an asset acquisition for $32.3 million in cash. In addition, up to $2.0 million will be due over a period of two years following the closing, contingent upon the financial performance of the acquired business.

UST Brands is a recognized provider of some of the finest survival and camping equipment on the market. The UST Brands line of personal safety and survival tools includes LED lights, patented all-weather fire starters, unbreakable signal mirrors, premium outdoor cutting tools, first aid kits, signal whistles, survival kits, camp kitchen products, and more. UST Brands' products are sold through a variety of outdoor, sporting goods, and large retailers, as well as through online merchandisers. Based in Jacksonville, Florida, UST Brands operates from a 100,625 square foot facility.

James Debney, President and Chief Executive Officer of Smith & Wesson, said, "We are very excited to announce the acquisition of UST Brands. With its complete offering of survival gear, UST Brands is our first acquisition that is entirely focused on the outdoor market, which is a key part of our vision to become the leading provider of quality products for the shooting, hunting, and rugged outdoor enthusiast. By expanding its product portfolio and retail presence, UST Brands delivered impressive compound annual revenue growth of 49% from 2012 through 2015. We believe that UST Brands' broad distribution network, which includes strategic retailers, online retailers, and distributors, will create incremental opportunities for our existing accessories products. Moreover, we believe that the UST Brands product portfolio will benefit synergistically from the product innovation, distribution network, and efficient sourcing model that have contributed to the success of our Accessories Division under the leadership of its President, Jim Gianladis."

Jeffrey D. Buchanan, Executive Vice President and Chief Financial Officer of Smith & Wesson, stated, "We intend to complete the acquisition of UST Brands with a combination of cash on hand and borrowings under our revolving credit facility, and we expect the transaction to close later this month during our fiscal third quarter. As of the date of signing, UST Brands' trailing twelve months revenue was approximately $24 million. Without considering any of the operating synergies, which are expected to occur in calendar 2018 and 2019, the purchase price represents an estimated multiple of approximately 11 times the trailing 12 month EBITDAS."

Andrew Kaufmann, President of UST Brands, said, "As a family owned business for many years, we are very proud of the strong growth, profitability, and outstanding reputation we have built in the market for survival and camping equipment. We are excited about the many organic and inorganic opportunities that UST Brands will be able to pursue in this segment of the outdoor market with the strong support and financial backing of Smith & Wesson."



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