The other day I reported an out-of-the-blue unsolicited $1 billion takeover bid for Freedom Group, the largest gun and ammunition manufacturer in the U.S. The March 11 proposal by a little-known Palm Beach, Fla., company called Global Digital Solutions struck me as dubious, given the would-be buyer’s tiny size and lack of a track record in the insular small-arms business. The needle on my bizarre-o meter twitched when Global Digital couldn’t put me in touch with its founder and chief executive, a serial tech entrepreneur named Richard Sullivan. Finally, there was the vituperative reaction from Freedom, a privately-held conglomeration controlled by the New York-based private equity firm, Cerberus Capital Management. What the heck is going on here?
That Cerberus might unload Freedom Group—whose brands include Remington, Bushmaster, DPMS/Panther Arms, Marlin, Para USA, and Barnes Bullets—isn’t so far-fetched. Bushmaster manufactured the semiautomatic military-style rifle used by the killer in the December 2012 Newtown, Conn., elementary school massacre., and investor outcry following that horrific event put pressure on Cerberus to announce it would seek a buyer for Freedom Group. After shopping the company around for a while, Cerberus said it would recapitalize Freedom in an arrangement allowing antsy investors to step away from the gun business.