Kinetic Group is a major manufacturer of small-calibre ammunition and includes brands such as Federal, Remington and CCI. The acquisition took place after more than a year of intense negotiations and faced competition from US investors. The transaction makes CSG the largest small calibre ammunition manufacturer in the western world, with the group expecting annual revenues of over €3.1 billion and EBITDA of €839 million. The acquisition strengthens CSG's global presence, particularly in the US.

Financing for the acquisition included a $734 million dollar bond issue with a high expected yield of 11.7%, as well as bank loans totalling €1.55 billion. The bonds are unrated, which explains the higher risk premium. The buyers were exclusively institutional investors, such as banks, insurance companies, mutual or pension funds.  Strnad's group has previously made other significant acquisitions, including Italian shotgun manufacturer Armi Perazzi and a German nitrocellulose producer.

The takeover of Kinetic Group faced political and bureaucratic obstacles, including skepticism among some US politicians about CSG's "Eastern" origins. The transaction was eventually approved by the US Committee on Foreign Investment. The acquisition comes at a time of heightened global interest in weapons, particularly in the wake of the war in Ukraine, and brings the Strnad Group into a strategic position as a leader in the industry.

Source: HN

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