January 6, 2020 / 9:05 AM / 17 days ago

Firearms maker Ceska Zbrojovka considers IPO to fund U.S. expansion

PRAGUE (Reuters) - Czech firearms maker Ceska Zbrojovka Group (CZG) said on Monday it was considering listing its shares on the Prague Stock Exchange among options to finance its expansion.

The company, which makes handguns and rifles, had earlier announced plans to build a production and distribution plant in Little Rock, Arkansas, as part of its plans to expand in the United States and enter the military and law enforcement market.

“To secure financing for its growth plans, CZG is currently considering all funding alternatives, including a possible public offering and listing of its shares on the Prague Stock Exchange,” the company said.

“No decision in this respect has been made.”

CZG reported January-September 2019 sales of 4.9 billion crowns ($216.20 million) and earnings before interest, tax, depreciation and amortisation (EBITDA) of 1.1 billion, up 12% on the year. Net debt stood at 250 million crowns.

In 2018, the company reported EBITDA of 1.2 billion crowns.

Among listed peers, U.S.-based Sturm Ruger & Co (RGR.N) traded at an enterprise value/EBITDA multiple of 9.08 and American Outdoor Brands Corporation (AOBC.O) traded at EV/EBITDA of 8.34 on Friday, using the last 12 months as base, according to Refinitiv data.

The aerospace and defence sector traded at EV/EBITDA multiple of 9.41.

($1 = 22.6640 Czech crowns)

Reporting by Jan Lopatka, editing by Louise Heavens

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