Gore Defense

Posts Tagged ‘Freedom Group Inc’

FGI CEO Calls GDSI Announcement of Intent to Buy “Publicity Stunt” – But Was It?

Wednesday, March 12th, 2014

Responding to yesterday’s press release by Global Digital Solutions of their intent to offer $1.082 Bn cash for Remington Outdoor Company, Freedom Group Inc CEO George Kollitides issued an internal memo to employees calling the announcement a “publicity stunt”. The memo was obtained by Grandview Outdoors and published in part on their site.

“A small, unknown investment entity publicly announced its desire to acquire the Remington Outdoor Company,” the memo obtained by Grand View Outdoors says. “If this wasn’t disruptive to our employees and customers, we would not acknowledge the news and recognize it for what it is: a publicity stunt from an agenda-driven group with no credible financing options.”

There are a few interesting point to ponder.

First, that’s a lot of cash for a relatively unknown company and their technology thrust areas aren’t exactly mainstream firearms. Leaving me scratching my head last night when I initially read the press release. Corrected PR states cash and common stock.

Second, GDSI claims to have filed a Form 8-K and announced an Unsolicited Letter of Intent to Acquire Remington Outdoor Company (aka Freedom Group) for $1.082 Billion. You don’t play around with the SEC. So if GDSI did file it, it means they have to mean it, or face trouble. And if they didn’t file it, they may get in hot water over saying they did.

Third, the GDSI announcement went out via PRnewswire and was picked up by the main stream media. This didn’t go out like an industry rumor. The GDSI CEO actually went on record about financial issues. Lying about this is something the SEC doesn’t take lightly.

Finally, the sections of the internal Remington memo we have seen, never says GDSI’s claim is untrue. Rather, it calls the announcement a “publicity stunt”. The info that is out there wasn’t released officially but leaked to a firearms centric site and not the main stream media. That’s pretty interesting considering last we had heard the whole kit and caboodle was for sale and Kollitides was working with some other Remington employees to raise the cash to purchase it themselves. Maybe someone spoke too soon? Of course, sometimes filing time is filing time.

All we have to go on is what has been leaked. So far, we haven’t seen any definitive statement to the public from Remington/FGI regarding the situation. This leaves serious analysts questioning the entire situation and leads me to believe someone is being less than truthful. The question is, which party?

UPDATE – PRnewswire has issued a correction of yesterday’s press release at the request of GDSI.

In the news release, Global Digital Solutions Files Form 8-K, Announces Unsolicited Letter of Intent to Acquire Remington Outdoor Company, with Estimated Annual Sales of $1.25 Billion and a Purchase Price of Approximately $1.082 Billion, issued 11-Mar-2014 by Global Digital Solutions, Inc. over PR Newswire, we are advised by the company that the first paragraph, second sentence, should read “GDSI has made an unsolicited offer to purchase Freedom for $1.082 billion in cash and shares of GDSI’s common stock,” rather than “GDSI has made an unsolicited offer to purchase freedom for $1.082 billion in cash,” as issued inadvertently.”

Read the SEC filing here secfilings.nasdaq.com. Interesting. It was an unanswered, unsolicited proposal but I would have expected FGI to disavow this as an unacceptable offer at this point.

FGI Purchases Para USA

Tuesday, January 31st, 2012

“We welcome Para into the Freedom Group Family of Companies,” stated. E. Scott Blackwell, Chief Sales and Marketing Officer of Freedom Group Inc.
“Para USA is a leader in handgun technology and their fine products exemplify quality, innovation and performance. Para is a perfect complement to our industry-leading family of brands, and our success in 2011 with the Remington R1 – 1911. We look forward to deploying both human and financial resources to continue to develop and supply current and future handguns for consumers and our channel partners. We also wish to thank all its employees for their continued dedication that has made Para a success.”

That’s how Scott Blackwell characterized Freedom Group’s purchase of Para USA in an official statement. For many years FGI has wanted to add a pistol manufacturer to their portfolio, even going so far as to internally launch the Remington R1, a 1911 clone that has received tepid response from the market.

Rumors swirled around the sale at SHOT Show after Gear Scout spilled the beans about the pending deal but FGI marches to their own tempo so it’s no surprise they took a few extra weeks to announce the deal. Generally, a very secretive conglomerate, FGI only recently removed any mention of the long defunct EOTAC clothing business from their website with never even an acknowledgement that it had closed its doors.

The best part of the FGI press release was this little gem, “Para will continue day-to-day operations at their Pineville, NC based facility.” We’d like to add a “for now…” to the end of that one.

In Other FGI News

Saturday, April 2nd, 2011

In addition to EOTAC falling off the face of the earth earlier this week, Freedom Group Inc filed on Friday, April 1st to withdraw their IPO bid with the SEC. Instead, they may do a private offering of stock. Cerberus owned FGI initially filed their intent to seek an IPO in October of 2009 but has faced several challenges since then including the resignation of CEO Ted Torbeck last year. Cerberus brought in Robert Nardelli, the former CEO of Chrysler and Home Depot, to serve as interim head of FGI. Readers may have heard of Nardelli who helmed Chrysler until they filed for bankruptcy protection. That is one hell of a track record. How do these guys keep getting hired by different companies? Whatever happened to a captain going down with his ship?