Smith & Wesson Acquires Thompson/Center Arms, Inc.

New Hampshire based company purchased for $102 million cash

By Press Release


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."

http://www.shootingtimes.com/swtc_121806/

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There is absolutely no overlap in our product lines

As anyone who has seen a Baikal single-shot or Remington's recent house brand muzzleloader will certainly attest.

hfs batman!

smith and wesson in the rifle biz!

quote:

smith and wesson in the rifle biz!

They used to sell the Howa bolt action, and lately have taken to making a AR clone. It will be interesting to see them running the T/C 22 selfloader against the Remington 591 and the Ruger 10/22. Still it will be weird seeing a Contender or Encore wearing the S&W logo.

I hope my opinion proves to be very wrong, but at the moment I can see no benefit whatsoever for shooters in this news.

I suspect that the way it will "help" S&W is not so much by diversification as by providing a temporary "cash cow" in the form of assets of various kinds, particularly easily liquidated ones.

I seriously doubt that S&W will maintain either the product line as we know it, or the quality on which we have come to rely from TC. Hope I am seriously wrong, but time will tell, I guess.

It would seem congratulations are in order to the previous owners of T/C. They built a fine company. Over the years they have offered shooters an fine line of innovative products, backed by ( in my experience...) EXCELLENT customer service. Smith and Wesson on the other hand is..well....Smith & Wesson. I doubt this acquisition will benefit T/C's customers..past, present or future.

Smith and Wesson is a whore, they will screw Thompson-Center up. Just natural state of affairs for Smith and Wesson. They have betrayed gun owners before and will do so again.

I just hope they don't screw up the quality also. When they started making the PPK/s I looked at one and several edges on the pistol were sharp enough to cut skin. Actually I didn't know it was made by S&W until I commented to the dealer that the quality of Walther must have gone down the drain. Interarms was doing a better job than the S&W version I handled. Needless to say I passed on buying it.

I thingk S&W has been turning out a really good product for about the past two years. The company had to pick itself up by the bootstraps after Tompkins drove it into the ground.

S&W sure screwed their reputation some years ago and that is going to hang with them a long time. However, they are not the same company they where. The quality of the products was never their problem. This won't hurt TC at all and who knows, it may actually help the one area they are a little weak on: the quality control of their barrels.