IPO Watch: Freedom Guns Down the Remington IPO (SWHC, RGR)

Usually “RW” forms filed with the SEC are for obscure companies withdrawing their registration statements for an Initial Public Offering.  A form RW has come from what many investors may consider to be an obscure company called Freedom Group, Inc.  This “Application for Withdrawal of Registration Statement” is actually from the parent of the Remington gun brand.  Freedom has acquired several key gun companies such as Bushmaster Firearms, Remington, DPMS Panther Arms, and Marlin Guns.

It seems that both Smith & Wesson Holding Corporation (NASDAQ: SWHC) and Sturm, Ruger & Co. Inc. (NYSE: RGR) would be happy that they have one fewer public gun company to compete with.  Still, it is not as if Remington and the other brands under Freedom have not already established market share.  Neither stock is up so far today either.

Freedom Group did not offer up a reason for the withdrawal.  It would be easy to speculate about the cases involving instances where Remington guns have reportedly misfired.  Whether that is the case depends upon which side you are on and we will leave it at that.  The only explanation is as follows:

• “At this time the Company has determined not to proceed with the initial public offering contemplated by the Registration Statement. The Registration Statement has not been declared effective by the Commission and the Company hereby confirms that no securities were sold in connection with the offering described in the Registration Statement. Therefore, withdrawal of the Registration Statement is consistent with the public interest and the protection of investors…”

What is  interesting is that the filing advised the SEC that it may undertake a later private offering.

Smith & Wesson Holding Corporation (NASDAQ: SWHC) has a market cap of $212 million and its sales in 2010 (April-year) of $406.1 million.  Sturm, Ruger & Co. Inc. (NYSE: RGR) has a market cap of $430 million and its 2010 sales were $255.2 million.

JON C. OGG