Smith & Wesson Acquires Savage Arms for $164.9 Million

Key Facts

Smith & Wesson completed its acquisition of Savage Arms on 21 October 2026 for an adjusted value of approximately $164.9 million, according to its filing with the U.S. Securities and Exchange Commission. The transaction closed concurrently with the signing of the merger agreement, moving from agreement to completion on the same day. The base value specified in the deal terms was $160.0 million, compared with the adjusted value at closing. The acquisition expands the company's product categories, with the company saying in its deal presentation that the transaction "expands Smith & Wesson's presence in the hunting and bolt-action rifle categories." This expansion links the addition of Savage's business to the acquirer with broader entry into those categories, in line with the rationale the company outlined for the acquisition.

The consideration paid to the seller comprised cash and common shares issued by Smith & Wesson, according to the terms in the regulatory filing on the transaction's completion. The company paid $42.4 million in cash at closing, representing the cash paid to the seller as part of the actual deal consideration. Alongside this payment, the company issued 8,993,968 common shares to the seller, making an ownership stake in the acquirer part of the consideration. A reference price of $13.62 per share was used to value the stock portion in calculating the acquisition consideration. The new shares equal 19.99% of the shares outstanding before the merger, the percentage specified in the filing relative to the share base before completion.

Savage adds a business with approximately $160 million in net sales to the combined operations, according to Smith & Wesson's acquisition announcement. Those sales cover the year ended 30 September 2026, placing the acquired business's scale in the context of a full year preceding the deal's closing. Operationally, the company's transaction presentation sets out a combined base of 5 manufacturing facilities, bringing together the entity's production operations following the acquisition. The combined entity has 2,227 employees, according to the figures the company provided alongside the manufacturing facilities in its deal presentation. The company places this operating base within the combined business, adding Savage's products associated with the expansion into hunting and bolt-action rifles to Smith & Wesson's operations.

In terms of its financial contribution, Smith & Wesson expects the acquisition to add about $18 million annually in earnings before interest, taxes, depreciation, amortization and stock-based compensation, according to its statement. This contribution is a full-year estimate before the additional gains the company expects from integrating the businesses following the acquisition. Separately, the company estimated initial integration savings of about $2.5 million on an annualized basis as part of its financial projections for the transaction. The company linked its purchase-price valuation to those savings, saying the price represents about 7.9 times Savage's adjusted earnings before interest, taxes, depreciation and amortization after taking them into account. The stated acquisition multiple therefore incorporates the expected initial savings in the company's valuation of the business added to its operations.

For shareholders, Smith & Wesson projected diluted earnings-per-share accretion of $0.07 on a full-year basis, according to the acquisition announcement. This estimate excludes the impact of acquisition accounting, consistent with the basis the company used to present the transaction's expected contribution to earnings per share. After including initial savings, expected annual accretion rises to about $0.10 per share, while continuing to exclude the impact of acquisition accounting. The company's estimates thus combine the acquired business's contribution to earnings per share with the additional increase associated with achieving initial integration savings. In presenting its financial position following the transaction, the company estimated pro forma net leverage of about 1.16 times, alongside its earnings and savings estimates.

On ownership and governance, JDH held 16.7% of the outstanding common shares after closing, according to the company's acquisition statement. Michael D. Fertitta was appointed to the board as the seller's representative, giving the seller board representation alongside its receipt of shares in the acquirer. Fertitta's appointment also included membership of the nominating and governance committee, according to the regulatory filing on the arrangements accompanying the deal's completion. Following the closing on 21 October 2026, the company committed to using commercially reasonable efforts to file a registration statement for the resale of the shares within 60 days of that date. The transaction amounts remain subject to a post-closing adjustment, which will be paid in cash under the terms disclosed by the company.