- Leverages Winchester's integration across commercial ammunition
value chain
- Enhances our ability to participate across high-margin
specialty calibers
- Drives value creation through immediate adjusted EBITDA
accretion and a fully realized expected synergy benefit of
$40 million
CLAYTON, Mo., Jan. 21, 2025 /PRNewswire/ -- Olin
Corporation (NYSE: OLN) ('Olin') today announced it has entered
into a definitive agreement with AMMO, Inc. (NASDAQ: POWW) ('AMMO')
whereby Olin will acquire AMMO's small caliber ammunition
manufacturing assets for a purchase price of $75 million. The transaction will be funded
through available liquidity. The assets will become part of Olin's
Winchester Ammunition business.
The acquisition includes AMMO's brass shellcase capabilities and
their world-class, 185,000 square foot production facility located
in Manitowoc, Wisconsin,
constructed in 2022. The Manitowoc
facility and its employees will complement Winchester's existing
production capabilities, enabling greater specialization and
broader participation across high-margin specialty calibers. Once
fully integrated with Winchester's industry-leading economies of
scale and integration across the commercial ammunition value chain
– from raw material sourcing, to projectiles, primers, and loading
capabilities – the acquisition is anticipated to yield realized
synergies of $40 million.
"The Manitowoc assets will
extend Winchester's leadership position and expand the reach and
value of our near full integration," said Brett Flaugher, President of Winchester
Ammunition. "The acquired assets will enable our legacy plants to
lower costs of existing high-volume products and increase our
ability to participate in higher margin specialty rounds at a cost
advantage."
Ken Lane, Olin's President and
CEO, remarked, "As highlighted during our recent Investor Day, this
investment continues the Winchester acquisition strategy, which
began with our White Flyer acquisition in 2023, to identify and
secure small bolt-on opportunities that are highly strategic and
immediately accretive to Olin. We expect the Manitowoc assets to generate $15 million to $20
million of incremental adjusted EBITDA in the first year
and, by the third year, we expect to have paid less than two times
adjusted EBITDA."
The transaction is subject to customary terms and closing
conditions and is expected to close in the second quarter of
2025.
OLIN COMPANY DESCRIPTION
Olin Corporation is a leading vertically integrated global
manufacturer and distributor of chemical products and a leading US
manufacturer of ammunition. The chemical products produced
include chlorine and caustic soda, vinyls, epoxies, chlorinated
organics, bleach, hydrogen and hydrochloric acid. Winchester's
principal manufacturing facilities produce and distribute sporting
ammunition, law enforcement ammunition, reloading components, small
caliber military ammunition and components, industrial cartridges
and clay targets.
Visit www.olin.com for more information on Olin Corporation.
FORWARD-LOOKING STATEMENTS
This communication includes forward-looking statements. These
statements relate to analyses and other information that are based
on management's beliefs, certain assumptions made by management,
forecasts of future results, and current expectations, estimates
and projections about the markets and economy in which we and our
various segments operate. The statements contained in this
communication that are not statements of historical fact may
include forward-looking statements that involve a number of risks
and uncertainties.
We have used the words "anticipate," "intend," "may," "expect,"
"believe," "should," "plan," "outlook," "project," "estimate,"
"forecast," "optimistic," "target," and variations of such words
and similar expressions in this communication to identify such
forward-looking statements. These forward-looking statements
include, but are not limited to, statements regarding the
anticipated timing and financial and other benefits of our proposed
acquisition of the ammunition assets of Ammo, Inc. These
statements are not guarantees of future performance and involve
certain risks, uncertainties, and assumptions, which are difficult
to predict and many of which are beyond our control. Therefore,
actual outcomes and results may differ materially from those
matters expressed or implied in such forward-looking statements. We
undertake no obligation to update publicly any forward-looking
statements, whether as a result of future events, new information
or otherwise.
The risks, uncertainties and assumptions involved in our
forward-looking statements, many of which are discussed in more
detail in our filings with the SEC, including without limitation
the "Risk Factors" section of our Annual Report on Form 10-K for
the year ended December 31, 2023, and
our Quarterly Reports on Form 10-Q and other reports furnished or
filed with the SEC, include, but are not limited to, the
following:
Business, Industry and Operational Risks
- sensitivity to economic, business and market conditions in
the United States and overseas,
including economic instability or a downturn in the sectors served
by us;
- declines in average selling prices for our products and the
supply/demand balance for our products, including the impact of
excess industry capacity or an imbalance in demand for our chlor
alkali products;
- unsuccessful execution of our strategic operating model, which
prioritizes Electrochemical Unit (ECU) margins over sales
volumes;
- failure to identify, attract, develop, retain and motivate
qualified employees throughout the organization and ability to
manage executive officer and other key senior management
transitions;
- failure to control costs and inflation impacts or failure to
achieve targeted cost reductions;
- our reliance on a limited number of suppliers for specified
feedstock and services and our reliance on third-party
transportation;
- the occurrence of unexpected manufacturing interruptions and
outages, including those occurring as a result of labor disruptions
and production hazards;
- exposure to physical risks associated with climate-related
events or increased severity and frequency of severe weather
events;
- availability of and/or higher-than-expected costs of raw
material, energy, transportation, and/or logistics;
- the failure or an interruption, including cyber-attacks, of our
information technology systems;
- our inability to complete future acquisitions or joint venture
transactions or successfully integrate them into our business;
- risks associated with our international sales and operations,
including economic, political or regulatory changes;
- our indebtedness and debt service obligations;
- weak industry conditions affecting our ability to comply with
the financial maintenance covenants in our senior credit
facility;
- adverse conditions in the credit and capital markets, limiting
or preventing our ability to borrow or raise capital;
- the effects of any declines in global equity markets on asset
values and any declines in interest rates or other significant
assumptions used to value the liabilities in, and funding of, our
pension plans;
- our long-range plan assumptions not being realized, causing a
non-cash impairment charge of long-lived assets;
Legal, Environmental and Regulatory Risks
- changes in, or failure to comply with, legislation or
government regulations or policies, including changes regarding our
ability to manufacture or use certain products and changes within
the international markets in which we operate;
- new regulations or public policy changes regarding the
transportation of hazardous chemicals and the security of chemical
manufacturing facilities;
- unexpected outcomes from legal or regulatory claims and
proceedings;
- costs and other expenditures in excess of those projected for
environmental investigation and remediation or other legal
proceedings;
- various risks associated with our Lake City U.S. Army
Ammunition Plant contract and performance under other governmental
contracts; and
- failure to effectively manage environmental, social and
governance (ESG) issues and related regulations, including climate
change and sustainability.
All of our forward-looking statements should be considered in
light of these factors. In addition, other risks and uncertainties
not presently known to us or that we consider immaterial could
affect the accuracy of our forward-looking statements.
NON-GAAP FINANCIAL MEASURES – ADJUSTED
EBITDA
Olin's definition of Adjusted EBITDA (earnings before interest,
taxes, depreciation, and amortization) is net income (loss) plus an
add-back for depreciation and amortization, interest expense
(income), income tax provision (benefit), other expense (income),
restructuring charges (income) and certain other non-recurring
items. Adjusted EBITDA is a non-GAAP financial measure. Management
believes that this measure is meaningful to investors as a
supplemental financial measure to assess the financial performance
without regard to financing methods, capital structures, taxes or
historical cost basis. The use of non-GAAP financial measures is
not intended to replace any measures of performance determined in
accordance with GAAP, and Adjusted EBITDA presented may not be
comparable to similarly titled measures of other companies.
Reconciliation of forward-looking non-GAAP financial measures to
the most directly comparable GAAP financial measures are omitted
from this release because Olin is unable to provide such
reconciliations without the use of unreasonable efforts. This
inability results from the inherent difficulty in forecasting
generally and quantifying certain projected amounts that are
necessary for such reconciliations. In particular, sufficient
information is not available to calculate certain adjustments
required for such reconciliations, including interest expense
(income), income tax provision (benefit), other expense (income)
and restructuring charges (income). Because of our inability to
calculate such adjustments, forward-looking net income guidance is
also omitted from this release. We expect these adjustments to have
a potentially significant impact on our future GAAP financial
results.
2025-02
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SOURCE Olin Corporation