Colt, one of the oldest and most venerable names in US firearms manufacturing may be on the verge of being acquired by one of Europe’s leading brands. Česká Zbrojovka better known as CZ are well regarded for for their classic CZ 75 pistols, their bolt actions and most recently their new assault rifle BREN series as well as the popular CZ Scorpion EVO pistol calibre carbine. The details of any possible CZ Colt acquisition are still unofficial.
Česká zbrojovka or Czech Armory in English could be about to take over Colt Fireams Mfg., a brand renowned not only for their long revolver lineage, running from Samuel Colt’s percussion revolvers in the 1850s through the Colt Single Action Army to the classic Colt Python and Cobra wheelguns, but also as the company responsible for the Colt 1911 pistol and bringing the M16/AR-15 platform to the fore.
CZ informed their investors back in November with a letter of intent that they were launching efforts to acquire “100% of the outstanding equity interest in Colt Holding LLC, a Delaware entity and indirect owner of the Colt Manufacturing Company LLC operating business.” The deal was anticipated to be “ready for execution by the end of 2020.” A number of European news outlets have already reported on the deal including Die Welt in Germany and Echo24 in the Czech Republic.
On the 9th January CZ issued a statement to its investors giving an update on the progress of the acquisition:
Prague, 9 January 2021 – CZG – Česká zbrojovka Group SE (“CZG” or “the Group”) further
to our previous disclosure with respect to the Letter of Intent dated November 5, 2020 for the acquisition of 100% of the outstanding equity interest in Colt Holding Company LLC (“Colt”), CZG hereby informs that it has agreed with Colt on the extension of the exclusivity period to complete its due diligence until the end of January 2021.
The parties have reached an agreement in principle on key commercial parameters of the transaction and they continue discussing the technical parameters, regulatory review requirements, and legal terms and conditions of the transaction.
Execution of the definitive documentation for the transaction is estimated to take place by the end of January 2021, subject to completing the negotiations, finalizing the transaction documentation, and obtaining necessary approvals of the relevant stakeholders.
Assuming achievement of these contingencies, the closing of the transaction would be subject to regulatory approval. Despite this significant progress in the negotiations, no assurances can be made that the transaction will be consummated.
It would appear that an agreement in principle has been made but key negotiations on certain elements continue. No official announcement has been made by either company at this time.
Colt, like a number of other US firearms manufacturers have struggled financially in recent years. Back in the summer of 2015 Colt filed for Chapter 11 bankruptcy but emerged before the end of the year. Colt is believed to currently employ over 700 staff and has recently been focused on military contracts for the US Government.
H/T – Ondřej T.