A mysterious company, privately owned, is buying up small American manufacturers of guns.
Its financial backer is a private investment organization. Very little is known about who the owners are. It is very big.
It has bought Remington. It has bought Bushmaster. It has bought DPMS, the military style semiautomatics.
It is like the Lone Ranger. “Who was that masked man?” The Freedom Group. It sells over a million guns a year. It sells 2.6 billion rounds of ammunition.
Yet nobody seems to know who is in charge, or what its plans are.
The backer is Cerberus Capital Management.
Cerberus is part of one of the signature Wall Street businesses of the past decade: private equity. Buyout kings like Feinberg, 51, try to acquire undervalued companies, often with borrowed money, fix them up and either take them public or sell at a profit to someone else. . . .
Today, Feinberg presides over a private empire that rivals some of the mightiest public companies in the land. Cerberus manages more than $20 billion in capital. Together, the companies it owns generate annual revenue of about $40 billion – more than either Amazon or Coca-Cola last year.
Why gun companies?
“There’s much less competition for buying these companies,” says Steven N. Kaplan, a professor at the University of Chicago Booth School of Business and a private equity expert. “They must have decided there is an opportunity to make money by investing in the firearms industry and trying to build a big company.”
Whatever the reason, Cerberus, through the Freedom Group, is now a major player.
What is Cerberus? “The longtime chairman of its global investments group is Dan Quayle, the former vice president.” Dan Quayle! Have I got a Dan Quayle story for you! It happened to me in 1977.
Next, the Freedom Group in rapid succession went after other firearms companies: DPMS; Marlin Firearms, a classic maker that came with two niche shotgun brands, Harrington & Richardson and L.C. Smith; and Dakota Arms. The Freedom Group also bought S&K industries, which supplies wood and laminate for gun stocks, as well as the Advanced Armament Corp., which makes silencers. It acquired Barnes Bullets, which makes copper-jacketed bullets popular with precision shooters and police departments.
These people think guns are going to be bigger than ever. So do I.