AMMO, Inc. (Nasdaq: POWW ) (“AMMO” or the “Company”), a premier
American ammunition and munition components manufacturer and
technology leader, is pleased to announce it has entered into a
non-binding letter of intent (“LOI”) dated February 9, 2021 with IA
Tech LLC for its GunBroker.com business (GunBroker.com), the
world’s largest on-line auction marketplace dedicated to firearms,
hunting, shooting and related products. The Transaction will
involve a merger or business combination resulting in GunBroker.com
becoming a wholly-owned subsidiary of AMMO (the “Transaction”).
GunBroker.com Transaction
- GunBroker.com is the world’s
leading online marketplace for the legal sale of firearms,
ammunition and accessories with over 6.0 million registered
users
- GunBroker.com’s estimated 2020 revenue of approximately $60
million, over $40 million of EBITDA, positive net income and strong
free cash flow
- Purchase price of approximately $240 million, representing a
purchase price to EBITDA multiple of less than 6.0x
- Transaction further expands upon AMMO’s vertical integration
strategy
- Current AMMO shareholders will own the majority of the combined
company
“This Transaction is accretive to our
shareholders and will be another vertical integration milestone for
the Company which diversifies our revenue base with high
profit-margin business offered through a premier brand deploying
best-in-class secure transactional technology,” said Fred
Wagenhals, AMMO’s Chairman and CEO.
Mr. Wagenhals noted that “we founded AMMO to be
a disruptive technology-based company that could serve the shooting
community with cutting-edge ammunition offerings, whether that be
for the military, law enforcement, hunting or recreational shooting
communities. GunBroker.com is a perfect fit and supports AMMO’s
mission across many levels. Steve Urvan had the foresight and
entrepreneurial drive to start GunBrokers.com more than 20 years
ago with the same spirit and vision. With his drive and intimate
understanding of how to serve our collective market, Steve created
the world’s largest online marketplace for the purchase and sale of
firearms, ammunition, and accessories.” Mr. Wagenhals explained
that “the combination made sense to our management team and Board
as it expands our ability to best ensure the retail market
continues to be served at the highest level while affording AMMO
with an opportunity to enhance its sales channels, operating
margins and drive increased shareholder value.”
Steve Urvan commented: “I am excited at the
prospect of bringing the GunBroker.com technology platform,
marketplace, and my world-class team to the AMMO family of
companies. GunBroker.com has long been the technology leader in the
industry and we look forward to continuing to build innovative
products and solutions for our expanding and loyal customer
base.”
Pursuant to the terms of the LOI, the parties
intend to sign a definitive agreement
(the “Definitive Agreement”)
and work expeditiously to close the Transaction on or before March
31, 2021. The final structure of the Transaction will be determined
by the parties following the receipt of tax, corporate, and
securities law advice. GunBroker.com’s enterprise value in the
Transaction has been valued at approximately $240 million, which
will be paid by the Company via a combination of cash and shares of
common stock.
The completion of the Transaction is subject to
a number of conditions, including but not limited to the following:
completion of mutually satisfactory due diligence, execution of the
Definitive Agreement, successful completion of a capital raise, and
receipt of all required corporate and third-party approvals,
including fulfillment of all applicable regulatory requirements and
conditions necessary to complete the Transaction.
No assurances can be made that the parties will
successfully negotiate and enter into a Definitive Agreement, or
that the proposed Transaction will be closed on the terms and/or
timeframe currently contemplated, or at all. As noted above, the
Transaction remains subject to a regulatory and Board approval,
along with other customary conditions.
Maxim Group LLC served as sell side advisor to
IA Tech LLC for its GunBroker.com business.
About AMMO, Inc.
With its corporate offices headquartered in
Scottsdale, Arizona. AMMO designs and manufactures products for a
variety of aptitudes, including law enforcement, military, sport
shooting and self-defense. The Company was founded in 2016 with a
vision to change, innovate and invigorate the complacent munitions
industry. AMMO promotes branded munitions as well as its patented
STREAK™ Visual Ammunition, /stelTH/™ subsonic munitions, and armor
piercing rounds for military use. For more information, please
visit: www.ammo-inc.com.
About GunBroker.com
GunBroker.com is the largest online marketplace
dedicated to firearms, hunting, shooting and related products.
Aside from merchandise bearing its logo, GunBroker.com sells none
of the items listed on its website. Third-party sellers list items
on the site and Federal and state laws govern the sale of firearms
and other restricted items. Ownership policies and regulations are
followed using licensed firearms dealers as transfer agents.
Launched in 1999, GunBroker.com is an informative, secure and safe
way to buy and sell firearms, ammunition, air guns, archery
equipment, knives and swords, firearms accessories and
hunting/shooting gear online. GunBroker.com promotes responsible
ownership of guns and firearms. For more information, please visit:
www.gunbroker.com.
Forward Looking Statements
This document contains certain “forward-looking
statements”. All statements other than statements of historical
fact are “forward-looking statements” for purposes of federal and
state securities laws, including, but not limited to, any
projections of earnings, revenue or other financial items; any
statements of the plans, strategies, goals and objectives of
management for future operations; any statements concerning
proposed new products and services or developments thereof; any
statements regarding future economic conditions or performance; any
statements or belief; and any statements of assumptions underlying
any of the foregoing.
Forward looking statements may include the words
“may,” “could,” “estimate,” “intend,” “continue,” “believe,”
“expect” or “anticipate” or other similar words, or the negative
thereof. These forward-looking statements present our estimates and
assumptions only as of the date of this report. Accordingly,
readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the dates on
which they are made. We do not undertake to update forward-looking
statements to reflect the impact of circumstances or events that
arise after the dates they are made. You should, however, consult
further disclosures and risk factors we include in Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, and Reports filed on
Form 8-K.
Reminder – Earnings Call
AMMO’s Fiscal Third Quarter 2021 Earnings Call
is scheduled for Tuesday, February 16th, 2021 (4:30 pm Eastern
Time). To participate in the conference call, please join by
dialing 1-877-407-0789 (domestic), 1-201-689-8562 (international),
or via webcast (http://public.viavid.com/index.php?id=143495) at
least 5-10 minutes prior to the scheduled start and follow the
operator’s instructions. When requested, please ask for “AMMO, Inc.
Fiscal Third Quarter 2021 Earnings Call.”
Investor Contact:Rob Wiley,
CFOAMMO, Inc.Phone: (480) 947-0001IR@ammo-inc.com
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