A Czech firearms manufacturer buying Colt Holding Co. is delaying plans for a new production site in Arkansas as it focuses on its Connecticut acquisition, but has no immediate plans to increase the West Hartford workforce of 300, a top executive said Monday.
Jan Drahota, vice-chairman of the board of CZG–\u010ceská zbrojovka Group, said at a news conference the company had been looking for another production base in the U.S. and settled on a site in Little Rock, Arkansas.
With the purchase of Colt for $220 million in cash and more than 1 million shares of the Czech company, valued at $20.3 million as of Monday, CZG will instead focus on Colt’s West Hartford site and Colt Canada Corp., the company’s Ontario subsidiary.
CZG is putting off the Little Rock project for three to five years, depending on market conditions, Drahota said.
“Colt is a big undertaking,” he said. “We decided to postpone construction in Little Rock to dedicate our resources in Connecticut and Canada.”
It’s “too early to speak” about increasing the workforce, he said.
The deal is expected to close by June 30 and CZG will initially focus on cost-cutting with the combination of the two companies, a spokeswoman said. CZG will later evaluate the potential to increase the production capacity of Colt, using the supply chain and investing in machinery.
Lubomir Kova\u0159ík, chairman of the board of CZG, said Colt is an “iconic brand and benchmark” for the military, commercial and law enforcement markets.
“This acquisition fits perfectly in our strategy to become the leader in our industry,” he said.
The combined group would have revenue of more than $540 million and CZG is looking to generate revenue of $1.2 billion by 2023. The acquisition of Colt is “definitely an important step on the way,” Drahota said.
Colt, which manufactures guns for the military, police and civilian customers, has designed and made firearms in Connecticut since 1847.
CZG is acquiring significant production capacity in the United States and Canada and is looking to substantially expand its global customer base, the company said. It makes firearms for military and law enforcement, personal defense, hunting, sport shooting and other civilian uses.
The transaction is subject to regulatory approval but is anticipated to close in the second quarter ending June 30.
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