AMMO Inc. Executes Letter of Intent to Acquire GunBroker.com

[JoeRoss]

SCOTTSDALE, Ariz., Feb. 11, 2021 (GLOBE NEWSWIRE) -- AMMO, Inc. (Nasdaq: POWW ) (?AMMO? or the ?Company?), a premier American ammunition and munition components manufacturer and technology leader, is pleased to announce it has entered into a non-binding letter of intent (?LOI?) dated February 9, 2021 with IA Tech LLC for its GunBroker.com business (GunBroker.com), the world?s largest on-line auction marketplace dedicated to firearms, hunting, shooting and related products. The Transaction will involve a merger or business combination resulting in GunBroker.com becoming a wholly-owned subsidiary of AMMO (the ?Transaction?).

More...
https://finance.yahoo.com/news/ammo-inc-executes-letter-intent-133000898.html

It is not a done deal, but......

[Sawin]

Very interesting.
Why would they want to acquire that site right now - given the Biden administration literally wrote out their intentions to stop online sales? wouldn't that immediately put Gunbroker.com out of business?

[MrPrena]

GunBroker.com Transaction

GunBroker.com is the world?s leading online marketplace for the legal sale of firearms, ammunition and accessories with over 6.0 million registered users

GunBroker.com?s estimated 2020 revenue of approximately $60 million, over $40 million of EBITDA, positive net income and strong free cash flow

Purchase price of approximately $240 million, representing a purchase price to EBITDA multiple of less than 6.0x

Transaction further expands upon AMMO?s vertical integration strategy

Current AMMO shareholders will own the majority of the combined company



I did not know GB makes that much money. 6.0x for private equity at this climate of economy is somewhat convervative.

[OctopusHighball]

I bought POWW stock a few weeks back, it's been through the roof lately. Up over 133% since I bought. Maybe they are feeling a bit flush as a result?

The current management of GunBroker doesn't have a stellar reputation. Maybe new ownership will improve that.