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Olin Inks Agreement to Acquire AMMO's Ammunition Assets for $75M
OLNOlin(OLN) ZACKS·2025-01-22 12:32

Core Viewpoint - Olin Corporation (OLN) has agreed to acquire AMMO, Inc.'s small-caliber ammunition manufacturing assets for 75million,whichwillenhanceitsWinchesterunitandisexpectedtogeneratesignificantsynergiesandincrementalEBITDA[1][2][3].Group1:AcquisitionDetails−TheacquisitionincludesAMMO′sbrassshellcasecapabilitiesanda185,000−square−footproductionfacilityinManitowoc,WI,whichalignswellwithWinchester′sexistingproductioncapabilities[2].−ThetransactionisexpectedtobefinancedthroughOlin′savailableliquidityandisanticipatedtocloseinthesecondquarterof2025,subjecttocustomarytermsandconditions[1][3].−TheManitowocassetsareprojectedtogenerate75 million, which will enhance its Winchester unit and is expected to generate significant synergies and incremental EBITDA [1][2][3]. Group 1: Acquisition Details - The acquisition includes AMMO's brass shellcase capabilities and a 185,000-square-foot production facility in Manitowoc, WI, which aligns well with Winchester's existing production capabilities [2]. - The transaction is expected to be financed through Olin's available liquidity and is anticipated to close in the second quarter of 2025, subject to customary terms and conditions [1][3]. - The Manitowoc assets are projected to generate 15-20millionofincrementaladjustedEBITDAinthefirstyearpost−acquisition[3].Group2:StrategicImplications−ThisacquisitionispartofOLN−Winchester′sstrategytoidentifyandsecuresmallbolt−onopportunitiesthatarehighlystrategicandimmediatelyaccretivetothecompany[3].−Thebuyoutisexpectedtodeliversynergiesof20 million of incremental adjusted EBITDA in the first year post-acquisition [3]. Group 2: Strategic Implications - This acquisition is part of OLN-Winchester's strategy to identify and secure small bolt-on opportunities that are highly strategic and immediately accretive to the company [3]. - The buyout is expected to deliver synergies of 40 million, enabling greater specialization and broader participation across high-margin specialty calibers [2]. Group 3: Market Performance - OLN's stock has experienced a decline of 33.4% over the past year, contrasting with a 4.5% decline in the industry [3].