Clarus Corporation’s (NASDAQ: CLAR) (“Clarus” and/or the “Company”) subsidiary Sierra Bullets, L.L.C., the Bulletsmiths, was selected to acquire certain assets relating to the Barnes Bullets brand of specialty hunting bullets (“Barnes”) in a chapter 11 bankruptcy auction process conducted by Remington Outdoor Company, Inc. and certain of its subsidiaries.
Sierra is expected to acquire Barnes for $30.5 million in cash, pursuant to an asset purchase agreement. For the trailing twelve months ended June 30, 2020, Barnes Bullets reported $21.8 million in sales. The acquisition is anticipated to be immediately accretive to Clarus’ earnings.
The acquisition of Barnes presents multiple strategic and financial benefits to the Company’s bullet and ammunition platform, most notably the addition of a comprehensive lead-free, all copper offering.
Clarus’ executive chairman, Warren Kanders, commented: “The Barnes acquisition caps off our strategy to build a leader in specialty premium bullets and ammunition. We now have a platform of scale that we expect to continue to deliver strong recurring revenue with high gross margins and free cash flow conversion. This acquisition also demonstrates our ability to patiently wait for strategic assets at attractive values that we expect to drive growth and maximize our returns on invested capital. We look forward to further acquisition efforts being in similarly accretive, strategic areas outside of the bullet and ammunition market.”
The transaction is subject to the approval of the United States Bankruptcy Court for the Northern District of Alabama at a hearing currently scheduled for September 29, 2020, and other customary closing conditions. Once approved, the negotiated asset purchase agreement will be entered into and the transaction is expected to close in October.
More financial details on Barnes Bullets will be disclosed in Clarus’ upcoming third quarter earnings call, which is anticipated to be in early November.