Alliant Techsystems Inc.
) announced to snap up Caliber Company with a deal value of $315
million in cash, subject to customary working capital adjustment.
The company expects to complete the transaction in first-quarter
of fiscal year 2014, which will end on Jun 30, 2013.
The new acquired unit will come under Alliant Techsystems'
Sporting Group segment. The completion of this transaction is
subject to the regulatory authorizations and customary closing
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Caliber Company is located in Westfield, MA and Lakefield,
Ontario. Savage Sports Corporation is a unit of Caliber Company.
The company designs, produces and sells centerfire and rimfire
rifles, shotguns and shooting range systems under the brand name
of Savage Arms, Stevens, and Savage Range Systems. These
ammunitions are utilized during hunting, competitions and
As of Mar 31, 2013, Alliant Techsystems' cash balance was $417.3
million and cash provided by operating activities at the end of
fiscal year 2013 was $274 million. The company intends to utilize
its available cash and funds under the existing credit facility
for this acquisition.
In fourth-quarter fiscal 2013, Alliant Techsystems' Sporting
Group segment registered a 14% year-over year increase in sales
to $320 million due to expansion in unit volume and ammunition
price hike. We believe this acquisition will not only help the
company to strengthen its presence in the state but will also add
Alliant Techsystems expects this acquisition to be accretive to
the company's earnings, given Caliber Company's presence in
hunting rifles, shotguns, commercial and security ammunitions and
shooting sports domain. It is also likely to enhance the
company's product coverage while strengthening its market
We consider Alliant Techsystems' latest take-over as a
significant step toward product portfolio diversification. We
believe this acquisition will further boost the company's
financial performance and bring in earnings flow from different
Alliant Techsystems currently has a Zacks Rank #2 (Buy). Apart
from Alliant Techsystems, other stocks in the sector that are
worth considering include
Orbital Sciences Corp.
) with a Zacks Rank #2 (Buy).