ATK (NYSE: ATK) has agreed to purchase the parent company of hunting rifle and shotgun manufacturer Savage Sports Corp. for $315 million cash as ATK seeks to grow its commercial and security ammunition business.
The acquisition of the Caliber Company is subject to regulatory approvals and other customary closing conditions and ATK expects the transaction to close by the first quarter of its 2014 fiscal year, the company said Monday.
ATK plans to finance the transaction with cash on hand and funds under its existing credit facility and expects the deal to increase its fiscal year 2014 earnings per share.
Mark DeYoung, ATK President and CEO, said the company is acquiring Savage for its sales distribution channels and manufacturing expertise, among other areas.
Savage, comprising of nearly 600 employees, has been a portfolio company of Minneapolis-based investment firm Norwest Equity Partners since January 2012.
ATK intends to integrate Savage into its sporting group upon completion of the transaction.
Savage designs and builds centerfire and rimfire rifles, shotguns and shooting range systems for hunting as well as competitive and recreational target shooting.