SWHC (last month) Filed a $250 Million Secondary as of yet not priced and I think that was filed with the intent to buy parts of Freedom Group.
SWHC has only done 2 Secondaries in the past 14 or so years, the biggest just $50 million, ……so this is the BIG one.
My position is and will be that SWHC will make an offering for whole or parts of Freedom and they will get a poor deal on whatever they buy. If you look at SWHC, and I mean really look....their magmnt. credentials are just horrific compared to RGR's.
The BOD and Insiders are like the Key-Stone Cops. Go read some of their bios.
The old CEO who almost made it go bankrupt with the last acquisition (Perimeter Security Fence Company) wrote off $85 million on a initial $50 Million acquisition. His name is Mike Golden, who just happened to write a 14 page book about his great effort to turn around SWHC; luckily the 14 pages were printed before the new buy went to heck.
Anyways, Golden figures he better step aside so he goes and hires a Brittish guy who had NEVER fired a firearm in his life before his upcoming interview with SWHC......so he borrows a friends Ruger and goes into the woods. Not making this up.....search Debney interview for SWHC.....anyways (my opinion) Golden hires Debney to now be a "Yes" man and Golden to still run Company as his own little kingdom.
The BOD od SWHC is involved with a couple Penny and Pink Stock listed Companies, nothing else with any stature. They're Penny Ante players in the Wall Street game.
So the answer to all this is Golden HAS and Would overpay for anything to further boost his ego or line his pocket. Don't worry, Cerubus will take him to cleaners on the price.
I did not say Freedom was worth as much as Ruger. My point was that Ruger sells for about $45 above its book value in the public market. Therefore, a private equity firm might be interested in Freedom at a substantial amount in the hope of eventually taking it public. That is what Cerberus thought when it bought Freedom.
Ruger's stockholders equity is only about $100 million (about $5.00 per share) yet the shares sell for about $50.00.
If Cerberus could have taken Freedom public, that public would probably have paid them a huge profit. I'm sure Cerberus hopes they can entice some other private equity firm to buy it with the hope they can eventually take it public and reap much of that profit.