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KBacon 12-18-2006 05:20 PM

Smith & Wesson aquires Thompson Center

Smith & Wesson Acquires Thompson/Center Arms, Inc.
[/align]New Hampshire based company purchased for $102 million cash
[/align]By Press Release
[/align][/align]Springfield, Massachusetts, December 18, 2006 -- Smith & Wesson Holding Corporation (Nasdaq: SWHC), parent company of Smith & Wesson Corp., the legendary 154-year old company in the global business of safety, security, protection and sport, today announced that it has entered into a definitive agreement to acquire Thompson/Center Arms, Inc., a 40-year old, privately held, New Hampshire-based designer, manufacturer and marketer of premium hunting firearms, for $102 million in cash. The transaction is expected to close in the beginning of January 2007.

Thompson/Center Arms, headquartered in Rochester, New Hampshire, manufactures and distributes innovative firearms recognized by hunting enthusiasts for their precision, performance, craftsmanship, and reliability. Thompson/Center Arms occupies a leadership position within each of its core product categories of black powder firearms (or "muzzleloaders"), black powder accessories, and interchangeable firearm systems, as well as a presence in precision rimfire rifles. The transaction will combine two leading firearms companies with complementary products, to yield a single provider of high- quality pistol, revolver, shotgun and rifle products.

Michael F. Golden, President and CEO of Smith & Wesson Holding Corporation, said, "The acquisition of Thompson/Center Arms is an important step in our diversification strategy. Thompson/Center Arms has consistently delivered both profits and strong gross margins while building its position in the hunting rifle market. This move will expand our presence in the $1.1 billion long gun market by providing immediate entry into the hunting rifle and black powder segments, which represents approximately $600 million in domestic sales. In addition to carving out a leadership role in black powder and single shot hunting rifles, Thompson/Center Arms has developed tremendous expertise in manufacturing long-gun barrels, a competency that will be important to Smith & Wesson as we expand our capabilities even further into the long gun market."

The purchase price for Thompson/Center Arms includes the company's Rochester, New Hampshire facility, which produces all of the company's products and is situated geographically between Smith & Wesson's manufacturing operations in Springfield, Massachusetts and Houlton, Maine. The transaction will be financed with the proceeds from the sale of convertible senior notes and an acquisition line of credit.

In conjunction with the acquisition, Gregg Ritz, President and CEO of Thompson/Center Arms, will be named President of Smith & Wesson - Hunting. He will continue to lead the Thompson/Center Arms operation and will head Smith & Wesson's efforts to develop its hunting business. Ritz said, "In addition to bringing together two well-established and highly respected brands in the firearms industry, this acquisition increases opportunities for both Smith & Wesson and Thompson/Center Arms. Smith & Wesson's ability to provide capital for growth and expertise in lean manufacturing processes will provide critical support for our new product pipeline and our need for increased capacity based on strong customer demand. In turn, Thompson/Center Arms' array of barrel manufacturing expertise, hunting rifle products, and accessories fits nicely into the Smith & Wesson portfolio of pistols, revolvers, shotguns and future hunting rifles. There is absolutely no overlap in our product lines, while there is tremendous similarity in our dealer and distribution channels and our marketing vehicles."


mayguy 12-18-2006 05:26 PM

RE: Smith & Wesson aquires Thompson Center
I hope they give as good service after S&W takes over. I have heard a few complaints on S&Ws service.

Duckbutter48 12-18-2006 05:38 PM

RE: Smith & Wesson aquires Thompson Center
Thats interesting that the CEO of T/C will now be the CEO of Smith. Am I the only one who thinks this may not be a bad thing.

HEAD0001 12-18-2006 06:26 PM

RE: Smith & Wesson aquires Thompson Center
Ha Duckbutter-not to be critical of you . But I think you should reread. It does not say he will be CEO. It says he will be President of S&W HUNTING OPERATIONS. I am sure this is not a CEO position.

Litigation is a major reason behind this. Companies have to get bigger to fight.

However I do agree with you. It very well may be a good thing. After what Smith went through a few years ago when they were owned by that Foreign company. Smith has already learned it's lessons. Tom.

Duckbutter48 12-18-2006 06:33 PM

RE: Smith & Wesson aquires Thompson Center
Ahh thx, Now I see that. I guess he'll just become the President of Smith. To be honest I don't know what the difference is in a large corporation like those 2. Heck Im not even the President or CEO of my own household.

I guess only time will tell.

HEAD0001 12-18-2006 06:43 PM

RE: Smith & Wesson aquires Thompson Center
A president is in charge of day to day operations of a specific area. One large company can have more than one president. The CEO is the main man. He is in charge of the Board of Directors of the company. The CEO makes all long term decisions. I doubt if that position will change. And besides that, who is in charge of their own house. Tom.

cayugad 12-18-2006 11:30 PM

RE: Smith & Wesson aquires Thompson Center
If they want to be a #1 muzzleloader company they will not change a thing. I hope that the new organization understands that. Of course the worry is, will they cheapen the product to increase profits, while at the same time allow them to sell at a cheaper price? I guess time will tell, but in the mean time I intend to shoot the devil out of my T/C rifles and not worry about it.

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