BRS makes significant investment (buys?) in Magpul Industries Corp.


Bruckmann, Rosser, Sherrill & Co., a private equity firm, has made a significant investment in Magpul. The press release, dated 21 September, was published the day before the press release announcing Triangle Capital’s $14.8 million Magpul investment. The wording of the press release makes me wonder if “buys Magpul” is a more accurate phrase than “significant investment in Magpul”.

NEW YORK, NY, September 21, 2011 – Bruckmann, Rosser, Sherrill & Co. (“BRS”), a New York-based private equity firm, announced today that it has made a significant investment in Magpul Industries Corp. (“Magpul” or the “Company”). Magpul’s executive management team, consisting of founder/President Richard Fitzpatrick, VP of Product Development Michael Mayberry and COO Doug Smith, will continue to be significant shareholders following the transaction. Financial terms of the transaction were not disclosed.

Magpul, based in Erie, Colorado, designs, assembles and markets a range of innovative, performance-driven accessories for firearms. The Company’s products include polymer-based magazines, sights, stocks, slings, grips, rails and other accessories primarily for the AR-15 rifle platform (“modern sporting rifles” or “MSRs”). Magpul also offers firearms training classes, training videos and other consumer products which embody the brand’s spirit of self-sufficiency. While many of Magpul’s products are designed for professional shooters, the customer base encompasses a broad spectrum of end-users from hobbyists and sporting enthusiasts to the most specialized and highly trained military units in the world. Magpul is considered the premier brand and leading innovator within the MSR accessories market.

Bruce Bruckmann, co-founder and Managing Director of BRS, said “We are very excited to partner with Rich, Mike, Doug and the rest of the Magpul team. They have built an extraordinary company and the preeminent brand within the MSR accessories market. We look forward to supporting the Company’s continued growth.”

Richard Fitzpatrick, founder and President of Magpul, said “We chose to partner with BRS because of their deep experience in the consumer products sector and ability to provide valuable strategic guidance and access to capital. We also recognized that BRS truly believes in the Magpul brand and supports our unique culture. We look forward to having BRS as our partner.”

I have heard (and this is unconfirmed) that BRS now own 51% of Magpul.

Magpul made a statement at ARFCOM

This is about growing in a way that is consistent with our values. To understand our values check out our Magpul Foundations.

Total acquisition by a larger company in this industry would have likely stopped Magpul from being Magpul. So instead we looked hard for partners to help us maintain our growth while staying true to our core concepts. Our new partners bring expertise in expanding the company, while letting us focus on our strengths of manufacturing and design.

After many months working with our new partners we are more confident than ever in our choice.

Rest assured, new products will be designed and built by the same team, in the US and to the same quality standard as our current line up. The only thing that will change is our ability to grow and release products.

It is worth noting that all of this happens just 8 months after Magpul’s former interim-CEO Travis Haley left the company.


Steve Johnson

Founder and Dictator-In-Chief of TFB. A passionate gun owner, a shooting enthusiast and totally tacti-uncool. Favorite first date location: any gun range. Steve can be contacted here.


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  • Rob

    Now tell me if my thinking is flawed, but it seems to me that the vast amount of money being poured into Magpul to me seems like an attempt for allowing the group to design manufacture and market their own firearms rather than selling the design and license to other companies, like the Masada-> Bushmaster/Remington ACR deal

  • 543

    Reading this from an investors perspective, this press release is stating between the lines that the shareholder(s)/owner(s) are cashing out of Magpul. This is a fairly common thing in the business world once a company becomes midsize in revenue. What usually fallows in my experience is the business gets taken over by corporate hacks who’s sole interest is maximizing profit for the investors with no real passion for the products being made.

  • jdun1911

    Nothing wrong with making money. Nothing wrong with cashing out and early retirement. Nothing wrong with being own by a corporation.

    Rob,

    They could spend their money tooling up for producing firearms. However that’s a high risk venture. How many firearms needed to be sold to paid back 14 million in investment?

  • Other Steve

    It’s been obvious to anyone that’s been interested in true products that something has been wrong with magpul for quite some time.

    This is a company that took 12+ months to release their own AR grip covered in rubber. Something hogue has had for years. It took them almost a year to release a slightly longer version of their MOE guard. It tool them at least 9 months to release an iPhone case!

    This is a company whose final product comes out of the injection mold finished. They only have 3 or 4 colors. Etc.

    I feel like to be that slow they must have had serious capital issues for quite some time. My guess is that their magazines have kept their other products going. If you would have pulled magazines away from them they would have been gone overnight. I believe this to be the case, although given their markup on all parts it’s hard to understand.

    This captial is probably a good thing for them. Maybe shot show and new product launches will be less embarrassing for them now. I look forward to more training options if that happens.

    I’m not worried ifthey loose their heart, there will be another magpul if this one dies. The falling prices of prototype injection molding almost guarntees that.

  • MississippianX

    I work in the same industry as Bruckmann. This is called a recapitalization. In effect, the shareholders of Magpul get to take some money off the table, and will continue to run the business. Certainly Bruckmann would not make the investment unless they felt like the executives of Magpul were capable of continuing to grow the business, as Bruckmann is an investor, not an operator. Good for the Magpul!

  • aeronathan

    Yeah, I heard stuff like that both times my company was bought out, excuse me, entered into strategic financing agreement. New boss is never better than the old boss…..

  • Erik

    I woulda thought Magpul’s valuation would be more then ~$29million.

  • Flounder

    Hopefully this just means Magpul will be able to build their awesome designs like the Massada before it was destroyed and turned into the ACR. Also maybe this means the PDR is finally going to be more than vaporware! That would be a dream come true! The RFB would finally have some competition and At a much lower price hopefully!

  • Lance

    Just like I said on other posts hope this will make new accessories and make lower prices on AR mags and accessories. But on anything else this wont make much of a difference on anything else.

  • ZomBkiller

    This, in my opinion as a business dude, will mark the end of Magpul as we know it. I hope I am wrong. I hope that Rob has got it right but 543 is spot on with his impressions. Small business stays true to their customers because they are all that they have. Big business however maximize profits and forgett about the folks (and business plan and products) that got them there.

    Who is the next Magpul? A small(er) company that innovates the way and what shooters buy will simply take its place. Magpul had the formula but appears to be abandoning it for the sake of getting paid. I believe that this opens the market for another company to step in where Magpul left and the shooters out there can continue to enjoy the latest must have products, but they will simply have another name on them.

  • http://www.magpul.com Richard Fitzpatrick

    @543 The founding members of Magpul still have substantial equity in Magpul. We are all still at work doing what we have done for the last 5-10 years.

    We just needed expertise in growing the company as we moved forward. At a certain point it doesn’t matter what exactly you are manufacturing, the growth problems are pretty much the same industry to industry. This is where the new investors have expertise.

    This will not effect our product design just our ability to get new products to market.

  • Gerald

    I second what 543 said. Every so often when a business is bought out by another company, good things result, but the overwhelming majority of the time, the purchasing party sinks a lot of money into the purchase and is under a great deal of pressure to justify the expense to the shareholders. Thus they are driven to make their new acquisition profitable BY ANY MEANS NECESSARY. Which usually accompanies dramatic spikes in the prices of products and/or dramatic decreases in the quality of the good produced. Little things that used to matter like quality control are usually the first to go. Followed by “redesigns” of existing product lines to make them cheaper to produce by cutting corners.

    I would not be surprised if 10 years from now people use the phrase “Back when Magpul didn’t suck…” to describe their current line of products.

  • Craig

    I agree w/ 543.. It sounds kinda like a self-fullfilling prophecy, a rectified revealation of a somewhat un-known entity that channels lots of capital into a well established business, becomes a majority shareholder (at 51%, if rumors are true), then gets involved.
    I just hope it doesn’t turn into a jumbled fiasco like when AMF bought out harley-davidson back in the1970’s…. wow, what a wreck that turned out to be.

  • http://www.facebook.com/sal.palma.FogHorn Sal Palma

    Part of the normal lifecycle of a company, is the point where the entrepreneur is no longer able to meet business demand with out-of-pocket capital. The question then becomes one of how to most effectively fund growth. Given Magpul’s success in the industry it is easy to see why venture capital firms are willing to step in and take an equity position in the company. It does a couple of important things. First it provides the operating capital to grow the product line and sales. Second, it reduces the liability side of the balance sheet and frees Magpul from high debt service obligations.
    Venture capital firms have as an exit strategy the proceeds from an IPO. How much of an IPO they take is negotiated up front.
    With venture capital comes a board of directors who see the business in a different light. If you’re lucky enough to end up with a board that lets you provide the talent and insight it’s a win-win. If you end up with a board that brings in geniuses (read morons) then you have a problem.
    Chris Costa and Travis Haley departure my signal a shift from strategic direction or it’s simply a sign of two bright and capable guys reaching for their own gold ring.
    Either way, the cards are on the table and the game has just started
    .