Olin's $75 Million AMMO Deal Boosts Winchester High-Margin Push

Olin Corporation OLN and AMMO, Inc. POWW shares are trading higher on Tuesday after Olin agreed to acquire AMMO’s small caliber ammunition manufacturing assets for $75 million.

The transaction, funded through available liquidity, will integrate these assets into Olin’s Winchester Ammunition business.

The acquisition includes AMMO’s brass shellcase capabilities and its 185,000-square-foot production facility in Manitowoc, Wisconsin, built in 2022.

The facility and its workforce will enhance Winchester’s production capabilities, enabling greater specialization in high-margin specialty calibers.

The transaction is expected to close in the second quarter of 2025, subject to customary terms and closing conditions.

Once integrated, Winchester’s economies of scale and vertical integration across the ammunition value chain are expected to generate $40 million in synergies.

Olin President and CEO Ken Lane said that the acquisition aligns with Winchester’s strategy of pursuing strategic, accretive bolt-on opportunities, following the 2023 White Flyer acquisition.

Lane expects the Manitowoc assets to generate $15 million to $20 million in incremental adjusted EBITDA in the first year, with a payback period of less than two times adjusted EBITDA by year three.

Brett Flaugher, President of Winchester Ammunition said, “The acquired assets will enable our legacy plants to lower costs of existing high-volume products and increase our ability to participate in higher margin specialty rounds at a cost advantage.”

As of Sept. 30, 2024, Olin’s cash balance stood at $225.9 million.

Price Action: OLIN shares are up 2% at $34.45, while POWW stock is up 1.67% at $1.52 at last check Tuesday.

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