Aerospace and defense company
Alliant Techsystems Inc.
) decided to purchase Bushnell Group Holdings, Inc. ("Bushnell")
from MidOcean Partners for $985 million. This acquisition will
enhance Alliant's product offering in commercial and security
ammunition, sporting arms and accessories market.
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Bushnell is a provider of branded sports optics, outdoor
accessories, performance eyewear and affordable sports products
for the sports enthusiast. Post-acquisition Bushnell will be
integrated into Alliant's Sport Group and will bolster its core
The acquisition of Bushnell will expand Alliant's global reach
and enhance its customer base. Bushnell has a proven record of
product development and innovation, with more than 10,000
customer accounts in more than 90 countries worldwide. Alliant is
expected to close the acquisition in the third or fourth quarter
of fiscal 2014, subject to regulatory approvals and customary
Alliant has already secured external financing of $900 million to
fund the acquisition. The total funding will be made through a
combination of this new financing, borrowings under its existing
revolving credit facility and cash on hand.
Alliant Techsystems makes strategic acquisitions with an
objective to enhance its product coverage while increasing its
market penetration. In Jun 2013, the company acquired Savage
Sports Corporation, a unit of Caliber Company, for $315 million.
In the last couple of years, Alliant completed several
significant acquisitions, including Blackhawk Industries Products
Group Unlimited LLC and Eagle Industries.
Alliant Techsystems expects transaction expenses and purchase
accounting expenses for Bushnell to dilute its fiscal 2014
earnings. The acquisition, including transaction costs, is
expected to turn accretive to earnings from fiscal 2015, and add
$1.00 in fiscal 2016.
Alliant's performance has been boosted by contribution from
organic and inorganic sources. This has enabled the aerospace and
defense company to surpass our expectation for the last ten
quarters on the trot. The long-term expected earnings growth rate
for this stock is 3.77%.
The markets also reacted positively to the decision. The shares
of Alliant ended at $98.34 on Sep 5, gaining 1.16% in a day.
Alliant currently has a Zacks Rank #1 (Strong Buy). Other
operators in the sector having a favorable Zacks Rank are
Elbit Systems Ltd.
). Elbit Systems currently has a Zacks Rank #1 (Strong Buy),
while Curtiss-Wright and HEICO Corporation retain a Zacks Rank #2