NEW YORK ( The Deal) -- Defense firm Alliant Techsystems (ATK) continued its push to diversify away from a reliance on government sales, agreeing Thursday to acquire private equity-owned Bushnell Group Holdings for $985 million in cash.
Overland Park, Kan.-based Bushnell is a designer and marketer of binoculars, rifle scopes, performance eyewear and other accessories used by hunters, sport shooters as well as in other outdoor sports. The company is expected to generate about $600 million in sales in calendar 2013.
Terms of the deal call for Arlington, Va.-based Alliant, known as ATK, to acquire the business from MidOcean Partners of New York. The price values Bushnell at about 10 times projected 2013 Ebitda, and is expected to contribute to ATK earnings by fiscal 2015.
The deal is ATK's second in recent months for a commercial firearms vendor, following its May announcement that it would buy Caliber from Norwest Equity Partners for $315 million. ATK is a supplier of ammunition to defense, law enforcement and commercial customers, as well as rocket motor systems, flares, countermeasures and other related aerospace products.ATK's sales have been depressed in recent quarters due to spending cuts by government customers, and the company has pledged to investors to try to moderate the impact of government cuts by growing its sporting group. Company CEO Mark DeYoung in a statement said buying Bushnell helps towards that goal. "This acquisition will broaden our existing capabilities in the commercial shooting sports and expand our portfolio of branded shooting sports products," DeYoung said. "In addition, this transaction will allow the company to effectively enter new sporting markets in golf, snow skiing and camping." ATK said it would fund the purchase through a combination of cash on hand, borrowings under an existing facility and through a new $900 million senior secured acquisition financing commitment. MidOcean acquired Bushnell in July 2007 from Wind Point Partners for a reported $500 million. The company, which employs 1,100 and has customer accounts in 90 countries, under MidOcean did a series of small deals to expand its range of products. A Kirkland & Ellis LLP team led by Andrew Herman and George Stamas represented MidOcean, while a Cravath, Swaine & Moore LLP team including Damien R. Zoubek, Craig F. Arcella, Stephen M. Kessing, David J. Kappos and J. Leonard Teti II represented ATK. -- Written by Lou Whiteman in New York