August 1998

Modern Sold As Consolidation Continues

Modern Muzzleloading, Inc., which less than a year ago was looking for acquisitions of its own in the hunting industry, has instead been acquired by Pradco Outdoor Brands. To date, terms of the deal have not been disclosed.

The acquisition gives Pradco, a subsidiary of Ebsco Industries, its first presence in the firearms market. Pradco bought game call and accessories producer Knight & Hale last year. The firm also manufactured a long line of fishing tackle products, including the Excalibur/Silver Thread line and lure brands Rebel, Heddon, Bomber, Cotton Cordell, Excalibur, Smithwick, Riverside, Arbogast, Creek Chub and Lazy Ike. Additional acquisitions are expected.

Ebsco is a privately-held conglomerate that owns, in addition to Pradco, a nationwide building joist manufacturing business, one of the country’s largest in-store display rack manufacturing operations, two major printing plants and a major periodicals marketing and distribution business.

Modern Muzzleloading will become a division of Pradco, but few changes are expected in day-to-day operations. The company will continue to run facilities in Centerville, Iowa, Conway, New Hampshire and Phoenix, Arizona.

Company founder Tony Knight and other current management are expected to remain with the business. Modern’s president Dale Watley, who acquired Knight Rifles in 1991, will leave the company.

Modern has spent a good deal of time in court in recent months, suing the Bureau of Alcohol, Tobacco and Firearms over the agency’s attempts to regulate certain muzzleloading rifles and defending a pair of patent infringement suits brought by Remington Arms Company. Neither Pradco nor Modern Muzzleloading indicated whether the acquisition would affect the ongoing litigation. Most sources expect no changes in Modern’s positions in the cases.

Transactions that haven’t been completed also dot the industry’s landscape. Remington, which has been on the block for a couple of months, has reportedly drawn interest from such industry notables as Smith & Wesson and Colt’s Manufacturing Company, as well as sporting goods manufacturers Brunswick and Polaris.

Market observers say Brunswick and Colt’s are unlikely to move further and question whether Polaris’ business interests tie closely enough with Remington’s. Sources say Smith & Wesson is the most serious candidate at this point.

Any deal for Remington is likely to take considerable time to complete. Goldman, Sachs & Company, the Wall Street investment banking firm retained by Remington, has asked potential buyers to “submit preliminary, non-binding indications of interest specifying an estimate of value.” Remington will evaluate those before narrowing the field to suitors.

 

Kahr Arms Sues Colt’s for Patent Infringement
Kahr Arms is suing Colt’s Manufacturing Company, Inc., claiming Pony and Pony Pocketlite pistols infringe on a Kahr patent.

The lawsuit, filed in US District Court in Manhattan, alleges that the two Colt pistols incorporate patent No. 5,415,075 granted to Kahr president Justin Moon. Kahr says firearms using the technology, which involves an offset barrel cam lug, benefit from such features as a compact, low profile along with reduced muzzle flip and felt recoil. The company claims Colt’s willfully used the technology in its two compact .380 ACP pistols without Kahr’s permission.

Kahr, a unit of Saeilo Inc., asked the court to award three times the monetary damages it has sustained, all attorney fees and for temporary, preliminary and permanent injunc-tions preventing Colt from making and selling the Pony pistols.