Remington Shoe Dropped
 

The writing has been on the wall for a month or two now as Remington prepared for bankruptcy protection, for which has now been filed. It’s uncertain where the company’s debts will be transferred, as it appears interest from the Navajo nation has waned in recent weeks. It’s yet another unfortunate misstep in a series of such after the collapse and condemnation which happened so many years ago now with the first debt transfer to Cerberus/Freedom Group. With the closures this year of DPMS, Bushmaster, and other Remington brands, and the this additional step of perpetuating transfer of debt and equity among various creditors, the potential for a resurrection to their former legacy seems farther away then ever before.

Remington Files Bankruptcy for second time in as many years

Not looking good at all.

I would generally expect the operating company will continue producing firearms. But they are running from the liability SCOTUS confirmed they carry, and have shifted debt carry and asset value far too much, I can’t imagine there is much left buoying the business. We’ll see who ends up picking up the debt in the bankruptcy. I read comparative reports which showed the Navajo Nation’s potential offer last month was about half of the valuation they offered in the 2018 bankruptcy filing, and even that has been withdrawn. So there can’t be very much perceived value left dangling in the business.

But I do expect we’ll see something like Winchester happening long before we stop seeing Remington’s offered for sale. They won’t any longer be Remington’s, as the Win’s aren’t win’s any longer, but they’ll still be on the market, made overseas and with a completely different marketing model than they currently carry.

Alternatively, of course, another company with a long history of divestment and acquisition has been Savage. A company which was unfavorably held as the only firearms manufacturing finger in a large outdoor sports conglomeration - and the company carried so much value that the employees themselves raised stakes and bought the company from their umbrella, and are doing swimmingly. And of course, Ruger’s trading price is at an all time high, with no end in sight until we get through election time.

But it's not the first time, I think Remington will be fine :)

That’s much akin to saying to someone with a reemergence, “but it’s not the first time you’ve had cancer, I think you’ll be fine.”

I am gathering a LOT of company's will be claiming the likes, and blaming it on this virus and asking for bail out moneys to stay afloat and I bet many get it
this is just the beginning of places filing or government bailouts/and the likes!,
yet I gather all the top of these company folks will still be getting paid, bonus's and such, just like the last time the GOV stepped in to bail out the vehicle company's that cried needing help

this again IMO< will be the wave of the future for company's all the more so when there is a big problem happening in the country like this corona virus !

but NO worries I am sure
us tax payers will have the burden of saving them , with increased taxes down the road!

This is a popular topic lately. The anti-gun crowd is cheering and the internet rumor mill is in full swing. As most of us do not know very much about the process perhaps some discussion using small words might be helpful.

A very important thing to know is that this is a Chapter 11 filing, not a Chapter 7. A Chapter 11 allows for reorganization and negotiations with creditors. A Chapter 7 is a liquidation. There is a lot of gamesmanship in a filing of this type. Will creditors be willing to play ball? People who deal with these issues are well aware that pushing too hard could result in a liquidation that would almost guarantee that the creditors will walk away with only "pennies on the dollar" or completely emptyhanded.

Selling assets (including intellectual property such as patents and trade names) could be a result leaving an empty bucket for the Sandy Hook plaintiffs. The SCOTUS is allowing those civil suits to go ahead in the Connecticut courts and the outcome is very unclear but currently there is no liability. If the Sandy Hook suits are successful it will almost certainly open the floodgates for other suits to be filed against other gunmakers. Defending the suits will be very expensive for Remington whether they win or lose. This might be a good time to sell the operating assets and let a new management company continue production. The current shareholders, the creditors, the Sandy Hook plaintiffs, the firearms industry, and we sportsmen all have a lot at stake.

There is much going on that only the insiders would know, and there are many moving parts. I am rooting for Remington to survive for another 200 years and for the firearms industry to survive the legal and political attacks. Obviously not everybody shares those sentiments.

Of interest, Remington has notified the New York State Department of Labor Worker Adjustment and Retraining Notification system that they may be laying off workers due to a plant closure in September. The notice claims all 717 of 717 total employees will be affected, and the workforce adjustment class is “possible plant closing/possible plant layoff.”

NY DoL WARN: Remington Notification if potential plant closure and layoffs

Searching the notification database for 2017 and 2018, there were no Remington notices on record for the previous bankruptcy filing - which largely makes sense, since the potential buyers were known.

Largely, this notification is assumed to be satisfying a requirement such they’re entering bankruptcy protection without an identified buyer, with expectation the company would fold in the next 60 days if a buoy isn’t found, either buyer or bailout.

I neglected to share this last month, but I’ve not seen any update the last few weeks. Looks like the last workers present in the Remington Headquarters and manufacturing site in NY will be closing it’s doors, permanently under this ownership, as of Sept 29. I’ve not been able to find details, but some industry folks are pointing to an auction of Remington business components at the end of this month. What an amazing time - the entire world is on fire, and a 200 year old fire extinguisher company is closing.

Crap. Very sad to see Big Green go.

[QUOTE=Nomercy448;4380433 some industry folks are pointing to an auction of Remington business components at the end of this month./QUOTE]

The auction bids are due at 10:00 CST on September 17th. Only the prequalified bidders will participate. Afterwards the bids will be analyzed to find the best deal (or deals) for the creditors. The US Bankruptcy Court has scheduled a hearing on September 23 to review and perhaps approve the recommended bid (or bids).

The results of this sale will be interesting. There will almost certainly be new owners of the assets of the business components but it does not necessarily mean the various Remington products will disappear from the marketplace. It could mean that the operating units are relocated to more "gun friendly" states that New York. What will happen to the Alabama facilities is anyone's guess at this time.

The only thing that anybody really knows about this situation currently is that all legal fees will be paid in full. There will be winners and losers.

I would love to imagine a Savage-esque path in which new ownership sustains and corrects years of mistakes, such Remington can stand on its own legs in a 20yr plan.

I’ll be disappointed if we’re handed another Winchester-esque result where the Remington brand name just becomes a value trade piece.

Equally, nagging at my attention - I haven’t asked around recently to the locals I know up in MN, but I have not heard what has been done with the Remington owned and recently closed DPMS facility. There’s a lot of gear and a lot of experienced workers in that area which assuredly have considerable value in today’s firearm market, so I can’t imagine that building and those hands shouldn’t come back to work building AR’s after all of this dust has settled.

Its truly sad to see an American icon go. But they really did it to themselves. At one time my gun safe held nothing but Remingtons. Now however all I have in there is a 870 Super Mag I use for waterfowl. Their firearms way back when were quality guns. Then they experienced a downfall in quality for a while which IMO really hurt them. Then trying to save themselves came out with a few pieces of junk supposedly to be more affordable. Now they have started to put some quality back into their firearms but the scar still remains. The 700 in all its models is still a fine firearm albeit there are better out there for the price they are charging. The 700 action is second to none which is why many customs rifles are built around it.
I surely hope someone buys them and they again start back to building more American legends!

A stalking horse bid (pre-auction bid by a debtor-selected bidder to establish the starting price of the auction, subject to separation reparation if the bidder doesn’t win the auction) has been made for the ammunition business. Another capital management firm JJE Capital has made the opening bid for the ammunition business at $65m.

I'm not sure I'll know how to kill a deer without a box of corelokts in my bag.
-Jake

Part of me is quite confident that the ammunition business will carry on, relatively unchanged. It’s a successful brand, so a new buyer/investor would do well to sustain the brand name.

Notwithstanding is my sliver of concern that the collapse of the firearms business might be sufficiently damaging to the brand, such a buyer/investor for the severed ammunition business might be advantaged to clip the Remington name out of their life. Same folks running the same machines, but new labels on the boxes and new people signing the paychecks. It wouldn’t be the worst thing that I could picture for the Remington ammunition business. But even under a different name, I expect SOMEONE will be left holding the IP rights and manufacturing equipment to make sure the Corelokt bullet survives into the future - and many of their other ammunition/bullets.

I suppose I do NOT know how many bullets/components they contract from other makers, such as the Accutip bullet line, which is manufactured by Hornady. The new owners may not wish to sustain such contracts, or the contractors not wish to sustain with the new owners, so we might see those fall aside - and if they’re a large enough portion of the business, it might nuke the entire Remington brand.

I’m a bit surprised to see only $65m valuation on the ammunition company, so I’m prone to expect it’s meant to be a severance + rebrand, not a buy and sustain play.

It's absolutely incomprehensible that a gun company could manage to go bankrupt in this political environment, let alone an ammo company.

It does sound like there's a little more to the story.

Video posted 5 minutes ago:

Just more of the same script - TGC’s video is 2 weeks late on the game. JJE Capital made the stalking horse bid on the ammo manufacturing division of Remington, which happens to be the same capital management company which holds PSA. The video also only references the pre-auction bid, which came a week before the scheduled auction... I’ve not yet heard the results, or if the auction did take place as scheduled. So while the bid referenced in the video MAY have been successful, it isn’t public yet, the video title “PSA buys Remington” is disingenuous click-bait.

https://www.nasdaq.com/articles/shou...ess-2020-09-17

this is latest.

Not my headline, dont kill the messenger.

Pending acceptance and validation of the bidders by the bankruptcy court, the following describes the dismantlement of the Remington brands (naming winning bidders with “back-up bidders” to become the winners should the court determine the respective winners are not eligible):

• Vista Outdoor, Inc. as the Successful Bidder pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit A with respect to the Lonoke Ammunitions Business and certain IP assets; and SIG Sauer, Inc. as the Backup Bidder thereto pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit B with respect to the Lonoke Ammunitions Business;
• Roundhill Group, LLC as the Successful Bidder pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit C with respect to the non-Marlin Firearms Business; and Huntsman Holdings, LLC and Century Arms, Inc. as the Backup Bidders thereto pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit D with respect to certain Firearms Business IP assets and Exhibit E with respect to certain non-Marlin Firearms Business inventory, respectively;
• Sierra Bullets, L.L.C. as the Successful Bidder pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit F with respect to the Barnes Ammunitions Business; and Barnes Acquisition LLC as the Backup Bidder thereto pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit G with respect to the Barnes Ammunitions Business;
• Sturm, Ruger & Company, Inc. as the Successful Bidder pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit H with respect to the Marlin Firearms Business; and Long Range Acquisition LLC as the Backup Bidder thereto pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit I with respect to the Marlin Firearms Business;
• JJE Capital Holdings, LLC as the Successful Bidder with respect to the DPMS, H&R, Stormlake, AAC, and Parker brands;
• Franklin Armory Holdings, Inc., or its designated assignee, as the Successful Bidder with respect to the Bushmaster brand and certain related assets; and
• Sportsman’s Warehouse, Inc. as the Successful Bidder with respect to the Tapco brand.

WIBX reporting of Remington Dismantlement

I’m all for the idea of a Ruger built 1894 with a threaded barrel. I don’t expect Franklin will sustain the Bushmaster name, nor will JJE/Palmetto retain DPMS, but I’m glad to think there might be a chance for those workers to keep doing what they do.

Interesting to see H&R fractured from the Marlin business. There is no reason it should have been retained, I suppose, but a lot of us expected it would be, since the two were joined prior to the Freedom acquisition and served such a common market segment. I wouldn’t expect PSA to launch a new line of H&R single shots, but hey, I suppose it could happen. Else, I suppose they simply bought the space and equipment.

I've got h&rs dating way back. Have probably owned 50 of them over the last 10 years or so.

But anyway.... Simplify this for a dumby

Will the remington 700 etc continue to be built? Corelokt ammo? Marlin 336s and 1894s and model 60s?

or are these things gone?
-Jake

It’s a bit difficult to follow, but as I read it, there are divisions listed as “pursuant to the business,” Assets, and IP. Bids on assets alone would signify only purchase of the equipments and locations. IP ownership and acquisition of the complete businesses would imply the ability to sustain manufacturing of given models.

It appears the winning bidders took assets AND IP (business), whereas several of the back-up bidders independently chose IP or Assets. For example, Vista took the ammunition business, whole hog, but Sig as the back-up bidder only appears to have bid for the assets. Round hill bid for the entire firearms business, but the two back-up bidders together would split the assets and IP. Equally, it does appear some of the Brand names were traded - unclear whether that includes the assets, for example, of DPMS.

Interestingly, if approved, Ruger will have right to produce the Marlin 60, meaning they’ll “own” what I expect to be over 90% of the semiauto 22LR market.

I'm a 10/22 fan personally but have owned model 60s as well. And don't want to see them go anywhere. They're a great little rifle.

-Jake

Ruger has already officially announced the acquisition AND their strategy for relocating equipment and resuming production of Marlin firearms:

Ruger News: Marlin Acquisition

It's better news than initially indicated. I hope Core-Lokt and Remy 700's get to stick around also.

Seeing all the consolidation in the industry by investment companies is concerning. I’m glad to see the old names around, but still concerned about non-gun people owning the companies. Investment companies only care about they money and not the name or history.