Conn.-based Ruger to bid on Remington’s ammo business
FAIRFIELD — Southport-based gun maker Sturm Ruger is making a bid on Remington’s $65 million ammunitions business, according to documents in federal bankruptcy court.
Ruger’s move, which surprises a leading analyst, is the latest sign of the surging consumer market for guns and ammunition in 2020, fueled by uncertainty over the coronavirus crisis and civil unrest over police brutality.
Tom Dineen, senior vice president and CFO for Ruger, declined to comment Thursday about bidding on the ammunitions business of the bankrupt Remington.
Ruger CEO Christopher Killoy told investors in late July that consumer
concerns about personal protection and home defense were driving 2020’s surge in demand for guns and ammunition.
Killoy said “oversized demand” was partly what helped Ruger post net sales of $254 million in the first half of 2020, compared to $210 million for the first six months of 2019.
One major gun manufacturer that hasn’t profited from the booming firearms market is Remington, which is in its second bankruptcy court in as many years. The nation’s oldest gun maker is saddled with debt it took on when investors left in 2012, after a gunman used one it its rifles to kill 20 first-graders and six educators at Sandy Hook School.
Some of the families who lost loved ones in the massacre sued Remington in what has become the highest profile lawsuit of its kind in the country.
A hearing sale for Remington’s ammunitions business is planned for Sept. 29.
Rich Duprey, an analyst at Motley Fool, said it would make more sense if a leading ammunitions maker such as Vista Outdoor or Olin was bidding for Remington’s ammunitions business.
“It might fit in with what they’re doing but I think it is a bit of a surprise they would move into ammunition,” Duprey said.
Duprey described Ruger as a “pure firearms company” with “a casting business that has been negligible to its revenue.”
“I guess there is a certain sense in becoming more vertically integrated and owning the whole firearms ecosystem,” Duprey said.