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Cerberus’ Freedom Group seeks to hold fire on IPO

7 Apr 2011

Rifle and ammunition manufacturer Freedom Group, a portfolio company of New York private equity firm Cerberus Capital Management, is seeking to pull its planned IPO, 17 months after filing.

Freedom originally announced plans to go public in October 2009, but has submitted a filing to the US Securities and Exchange Commission requesting that the listing be withdrawn, as sales dip from the peaks of 2009.

Freedom Group enjoyed an upsurge in sales from late 2008 to mid 2009, driven by fears that the new Obama administration would institute more restrictive gun legislation, resulting in a 31 per cent increase in demand for sporting rifles over the period.

Since then, sales have dropped to below 2009 levels, although Freedom claims that demand is higher than it was in 2008.

In a results filing for the quarter ended 30 September 2010, the company said, “We believe the surge in demand for modern sporting rifles and certain consumer long guns ended in the third quarter of 2009 and has softened for certain pistol and revolver ammunition in 2010, resulting in declines in industry sales.”

The company, which did not elaborate on its reasons for seeking to withdraw the IPO, but said that no securities have been sold in connection with the listing.

In the closing days of 2010, Cerberus sold Chrysler Financial, the auto lending arm of car maker Chrysler, to Toronto-Dominion bank for $6.3bn in cash.

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