Last week’s announcement finalizing the purchase of Colt by the CZ Group left fans of both brands with more questions than answers. After all, an American icon being acquired by a successful firearms company from the Czech Republic might create a bit of anxiety in the purists of our world. But unlike takeovers of American firearm brands by conglomerates with little to no industry experience, this deal seems to be different. So what does it actually mean when we say CZ Buys Colt? TFB was lucky enough to have access to CZ Group’s President and Chairman of the Board Lubomír Kovařík for an exclusive Q&A session and additional details.
CZ Buys Colt – More @ TFB:
- Colt – https://www.colt.com
- CZG – https://www.czg.cz
- CZ – https://www.czub.cz/en/
- CZ-USA – https://cz-usa.com
CZ BUYS COLT: An Exclusive Interview With Lubomír Kovařík – President CZG
TFB: What made CZ want to purchase Colt? Does this acquisition include factories and machining, or does it focus on primarily intellectual property and branding?
Kovařík: Colt is an iconic brand with global recognition. It has defined several product categories in the history of small arms production, and we are proud to have the brand, which has stood shoulder to shoulder with the United States military for more than 175 years and which continues to evolve in order to safeguard today’s warfighters, in our portfolio. By this transaction, CZG will gain an additional production capacity and expand its customer network in North America and other countries around the world. Through Colt, CZG will become a supplier to Mil/LE customers and armed forces in the United States, including US Army, which has been part of our strategy. We are convinced the merger will bring significant operational, commercial and R&D synergies to both brands. For example, Colt has a very well-developed supply chain in the USA, from which the CZG can also benefit. CZG has a very capable and sophisticated system of research and development (R&D), from which Colt can benefit. CZG’s R&D activities will thus strengthen Colt’s ability to bring new and innovative products to the market.
In addition to the brand, CZG will also acquire factories and machining through the acquisition, namely Colt’s Manufacturing Company LLC and Colt Canada Corporation.
TFB: As two long established brands with their own pistol and rifle designs, how does CZ view this acquisition working?
Kovařík: The portfolios of both companies complement each other perfectly: Colt has world-famous revolvers, CZG does not produce those. CZ produces rimfire rifles and centerfire rifles, which are not within the Colt portfolio. Furthermore, the CZ and Colt assault rifles are based on a different platform. In short, we do not compete, but we complement each other. This also applies to the distribution of the market. CZG supplies primarily to the civilian market, while Colt generates more than half of its revenues in the military and law enforcement market. We also see the possibility to produce CZ’s polymer pistols and PDWs in Colt’s facilities.
The acquisition of Colt fits perfectly into our strategy. We have a strong confidence in merging of our corporate cultures, in good chemistry, as well as complementarity for both our brands – CZ and Colt. Both brands will benefit from mutual synergies.
TFB: What are CZ’s plans in terms of research and development towards new weapons – something that Colt has stagnated on in recent years.
Kovařík: We see the opportunity in R&D synergies and plan to develop Colt further, including new products. CZG has a well-developed R&D program and Colt will benefit from that.
TFB: Will CZ keep the factory in Hartford, Connecticut? Or look to relocate to a more gun-friendly state?
Kovařík: We do not plan any changes either in terms of the factory’s location or in terms of the company’s management. We consider Colt’s current management to be very competent. Thanks to its activities in recent years, significant operational restructuring took place and the financial performance of the company improved substantially. We are looking forward to our future cooperation. We primarily plan to focus on maximizing the synergies that the combination of the Colt and CZ brands offers us.
TFB: Will Colt continue to focus on the military market (with manufacturing focused on M4 carbines) under CZs leadership or reenter the civilian market with new product lines?
Kovařík: Colt is a benchmark for the law-enforcement markets globally. It delivers to the US Army since mid- 19th century, thus more than 175 years. It is a key supplier for the armed forces of Canada, United Kingdom, and many other countries. Colt pistols and revolvers are carried by military and law enforcement personnel in numerous countries and are used by hunters, sportsmen and sportswomen worldwide. Colt commercial, sporting, military and law enforcement rifles enjoy similar renown. CZG and Colt will continue developing both the Mil/LE and civilian market product lines of the Colt brand.
TFB: For retail consumers, please explain the relationship between CZ, CZ-USA and Colt.
Kovařík: Česká zbrojovka (CZ) and CZ-USA are the subsidiaries of Česká zbrojovka Group (CZG). CZG markets and sells its products mainly under the CZ (Česká zbrojovka), CZ-USA, Dan Wesson, Brno Rifles and 4M Systems brands. CZ (Česká zbrojovka) is the main operating company of the Group, located in Uherský Brod, the Czech Republic. It produces firearms for civilian, armed forces and law enforcement customers worldwide. The company exports products to more than 90 countries. Currently, Česká zbrojovka’s firearms are widely used by law enforcement agencies and armed forces in more than 40 countries worldwide. CZ-USA is based in Kansas City, Kansas. CZ-USA mainly imports its products from the Group’s production facility in the Czech Republic. Following the regulatory approvals, Colt will become another subsidiary of CZG. CZG will gain production presence in the USA. CZG needs another strong production capacity next to its main production facility located in the Czech Republic to satisfy the high demand for our products. Having a production in the USA will also enable us to comply with the Buy American Act.
TFB: The firearm manufacturing market is booming. How soon can we expect to see a ramp-up in Colt production?
Kovařík: Following the completion of the transaction, the process of integration of Colt within the CZG Group will follow. CZG and Colt management intend to focus all their effort on this process. We plan to develop Colt further. We also plan to use Colt’s spare capacity for the assembly of CZ products. In the following phase, we would like to increase production capacity of Colt, both by using the existing supply chain and through the purchase of machinery. In the future, we will address the possibilities to produce new products.
TFB: Do you foresee CZ manufacturing Colt branded products in the Czech Republic?
Kovařík: No, Colt products will continue to be produced in the USA.
TFB: Colt revolvers are popular in the U.S., but the newer “remake” models have not lived up to their original designs. Will CZ continue producing Colt revolvers?
Kovařík: First, based on our review of Colt’s recent Revolver Launch, Colt’s new revolvers have been an overwhelming success with customers. Selling more than 70,000 units of Cobra’s and King Cobra’s and Python’s to date, clearly the consumers and retailers like what Colt has re-engineered. As many industry experts have stated, “the Python is the nicest double action revolver Colt has ever produced” and that says a lot coming from the long history of successes Colt has enjoyed with revolvers over the years. So yes, Colt will continue supporting its Stocking Dealers and customers with these offerings.
TFB: Colt is one of the most American firearm brands in history. How does CZ plan on preserving Colt’s legacy while bringing manufacturing and design into the 21st century?
Kovařík: Synergies will help not only preserve Colt’s legacy, but also further develop its products. The acquisition of Colt fits perfectly into our strategy, we believe in the successful connection of our corporate cultures, good chemistry and complementarity between the CZ and Colt brands. This will help us move closer to our goal of playing a key role in the expected consolidation of the small arms segment and becoming a key partner for the armed forces and a recognized premium brand in Europe and in the United States of America.