An American In Prague: CZ Buys Colt
Today, an American icon goes overseas (and hopefully brings some vowels with it).
Colt’s Manufacturing hasn’t exactly had the easiest time of it for the last decade or so. The company’s firearms retain the rock-solid reliability for which they’re justly famous, but Colt’s financial footing has been a bit rockier. We’ve just learned that a European manufacturer of fine firearms has acquired Colt in a move that surprised the gun industry’s gun-dits almost as much as it challenged the special-characters keys in our little-used Word menus. What does this mean for Colt? Will manufacturing remain here in the States? Will someone airlift some very important vowels to Prague so I can keep writing about Colt guns without breaking my fingers? Here’s what we know:
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ÄeskĆ” zbrojovka Group SE (āCZGā or āthe Groupā) hereby informs that on 11 February 2021, it signed a definitive agreement to acquire 100% of the outstanding equity interest in Colt Holding Company LLC (āColtā), the parent company of U.S. firearms manufacturer, Coltās Manufacturing Company LLC as well as its Canadian subsidiary, Colt Canada Corporation.
Subject to the terms and conditions of the definitive agreement, CZG shall acquire a 100% stake in Colt for upfront cash consideration of $220 million and the issuance of 1,098,620 shares of newly issued CZG common stock. The agreement also provides for potential earnout consideration of up to 1,098,620 shares of newly issued CZG common stock if defined EBITDA thresholds are achieved in years 2021 – 2023.
Commenting on todayās announcement, LubomĆr Kova?Ćk, President and Chairman of CZG, said:Ā āThis merger is a strategic step for both companies. 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. We are proud to include Colt, which has stood shoulder-to-shoulder with the U.S. Army for over 175 years, in our portfolio. We believe in the successful connection of our corporate cultures, the proven track record of the current management team and the complementary nature of the CZ and Colt brands. The combined group will have revenues in excess of USD 600 million and presents a real small arms powerhouse. The experience of CZ and Colt management will further strengthen both brands and ensure CZ and Colt continue to deliver top quality products and solutions to all our customers.ā
Dennis Veilleux, President and CEO of Colt, agreed: āWe are very pleased with the prospect of such a strategic combination. 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.ā
The acquisition is to be financed from the Companyās existing cash resources, including recent IPO proceeds, and from the contemplated bond issuance.
The transaction is subject to regulatory approval but is anticipated to close in the second quarter of 2021.
With this strategic move, CZG will acquire significant production capacity in the United States and Canada and substantially expand its global customer base. Colt is a traditional supplier to global military and law enforcement customers. Among others, Colt is a long-term supplier to the U.S. Army (which relationship dates back over 175 years) and, through its Canadian subsidiary, Colt a designated exclusive supplier of small arms to the Canadian military.
Hopefully, CZ will continue to make and market the COLT SAA in quantities so most people including myself can buy one. The COLT line is relatively thin ie ARs 1911s revolvers and that’s it. CZ looks to bring in a new spirit. If the COLT SAA is not made again in number COLT/CZ will lose out to Standard Mfg, Uberti, Ruger, Pietta and others who cater to that market.
I welcome CZ to the table, they have proven to be capable of producing quality firearms for many years and I expect they will be a great improvement for the Colt brand,
I do fervently hope that CZ will move any and all manufacturing of Colt products to states that support the 2nd amendment and favorable gun laws so as to provide continues production.
Really like my CZ40. Makes since CZ would take over Colt and be more innovative.
As an owner of a CZ455 I know CZ makes a quality product. The only problem i’ve had was dealing with their US headquarters for parts which was a bit of a nightmare. I think they have been expanding their US presence since then and this purchase proves their commitment.
I’m not sure what to think about this.
While CZ manufactures fine arms, this is just one last nail into US industry. When are we going to learn to properly run a company and not let it be offshored?
I agree 100%. Whats it going to take to keep an American company like Colt here.
Iām a longtime fan of the existing Colt Guns but most of the Iconic Colt Guns are gone!! The fabulous Anaconda in .44 Magnum, the iconic King Cobra, the Detective Special, and Colt makes no new modern automatic! They have been living on the past, decaying as a company, and their management is terrible! CZ makes great forearms and hopefully will give lifesaving CPR to the Colt brand!
Well put… old school is cool but innovative new models keep a company alive… good examples are Ruger & Henry
Well, just keep in mind when they bought Dan Wesson firearms they basically quit making revolvers and they finally did bring the 357 magnum back. Now they sell for almost $2000. So as far as getting revolvers from Colt Iām not so sure. They seem to like semi auto pistols.
Ralph C.
I would like to read the real story by an employee on the merger between CZ and Colt Colt .CEO Dennis Veilleux said there has been a historic turn around of operations and financial reforms in the last five years. That kind of statement usually means they have ran this company in the ground as far as they can so a merger Is the only way to get his golden parachute! Not my first rodeo!!
Am I the only one not understanding Stephen Russell ‘s post. What
are the “Co’s” supposed to mean?
Colt like America itself has fallen into the welfare class. Many years of living on gov’t contracts has made them weak and uncreative. Four+ decades ago Colt Industries was a force to be reckoned with…… then the sell-off began. sad but predictable .
I don’t think CZ’s ownership of Dan Wesson has hurt that brand one bit. I love my Colt’s but the company is managed by idiots that seem to have no clue how to compete in the civilian market. Colt has not created one new successful handgun design in decades. The company has lived on military M-4/16 contracts for years and FN beat them on that last re-compete. I look forward to seeing what CZ brings to the table.
Well CZ owns Dan Wesson of which I own a few and they are still some very high quality firearms. I don’t think this acquisition will hurt Colt but rather strengthen them.
Czechoslovakia has a long and admirable history of arms production. Their arms industry was one of the major motives for Hitler’s takeover of that country just prior to WWII and for the Soviet Union’s domination for nearly half a century. As the owner of several CZ firearms over the years, I can testify to the continuing high quality of CZ products.
CZ is from the Czech Republic. The Nazi takeover of Czechoslovakian was actually predicated on the large German population in the Sudetenland.
Hitler used that same lame excuse for attacking all of Europe.
I wonder how this will affect sales to U.S. Military. I was under the impression that all military equipment had to be procured from American Companies!
You may be thinking of the Buy American Act relative to buying from American companies. Technically, products only have to be 51% US content to qualify, which includes labor costs. If Colt manufacturing remains in US no doubt it will qualify.
I think they might just have to be made in the US, which is why H&K set up shop in Columbus, GA.
That’ll all be changing soon. China will be our military’s preferred dealer thanks to China Joe.
I don’t think Baretta had a problem selling the Army 9mm handguns and Sig has the current contract.
Well, they by Beretta, Sig Sauer, H&K, Glock, and many others.
Not the case. FN, Berretta, SIG pop right up. Granted they formed US subsidiary’s but the parent is foreign.
Imho this will benefit all parties involved, CZ makes a great product. I wish them success.
When I was a young man everyone could afford a Colt, not cheap but affordable. Automatics were unreliable, and everyone including fellow military friends had a revolver. Now they are for the well to do. Colt have priced themselves out of the market. What else could it be. They have a name, history, reputation and quality. The Colt Python is my all time favorite handgun period. But I cannot afford to pay 2 to 3000 thousand dollars for one.
Right now it seems like they just can’t meet demand for Pythons. $1,400 is a bit of a stretch for me but doable . My local dealer said they are only getting in 1 or 2 a month and they have atleast a 1 year backlog of people that have put down deposits. What happens when they bring the Anaconda back?
Well, I Did want a Defender. Not so much now.
Why not now. Because CZ bought colt?
That’s curing your nose off to spite your face.
All in all, I think this is good news. CZ (and the Czechs, themselves) has a long history and strong reputation as a matter of quality firearms. And CZ has the financial stability to make sure Colt has the backing that it needs to prosper.
And think of the possibilities for cross germination between the two product lines. š¤š
Indeed! As an Owner of some Dan Wesson 1911’s, and Colt 1911’s, I can tell you Absolutely Dan Wesson 1911’s are Superior to Colt’s Quality. Fit, Finish, etc ALL Better . So, if CZ Let’s The Dan Wesson Factory in Norwich NY make the Colts, the Quality will Improve a LOT! That Dan Wesson Factory also make Revolvers too! š
My thoughts exactly. Thank you for saying it so well.
Will said Co boost Colt sales or fold brand into main brand?
Will said Co boost production?