Olin Corporation (NYSE: OLN) has recently completed the acquisition of the small caliber ammunition assets of Ammo, Inc. This acquisition includes the brass shellcase capabilities and a newly constructed, 185,000 square foot production facility located in Manitowoc, Wisconsin.
The acquisition is expected to be immediately accretive to Olin’s shareholders, with incremental expected first-year adjusted EBITDA of $10 to $15 million, including synergies realization. Once fully integrated, the acquisition is projected to yield adjusted EBITDA of $40 million per year with full realization of synergies.
Olin Corporation's president and CEO, Ken Lane, emphasized the strategic nature of the acquisition, stating that it aligns with the company's capital allocation framework and is in line with their Winchester strategy to identify and secure small, bolt-on opportunities that are highly strategic and immediately accretive. He also mentioned that by year three, they expect to have paid one and a half times adjusted EBITDA for these assets.
Brett Flaugher, president of Winchester Ammunition, highlighted that the specialization of the Manitowoc facility will expand their reach into higher-value commercial, international military, and law enforcement calibers, while deepening their integration across the ammunition value chain.
Olin Corporation is known as a leading vertically integrated global manufacturer and distributor of chemical products, as well as a leading U.S. manufacturer of ammunition. Winchester’s principal manufacturing facilities produce and distribute a wide range of ammunition products, including sporting ammunition, law enforcement ammunition, reloading components, small caliber military ammunition and components, industrial cartridges, and clay targets. Following these announcements, the company's shares moved 2.6%, and are now trading at a price of $20.89. If you want to know more, read the company's complete 8-K report here.
