• 73°

Cerberus to sell gun company that makes Bushmaster

The company that makes one of the weapons used to kill elementary school children in Connecticut is being put up for sale by its owner, which called Friday’s tragedy a “watershed event” in the debate over gun control.
The private-equity group Cerberus Capital Management said Tuesday it will sell its controlling stake in Freedom Group International, the maker of Bushmaster rifles. Investors also continued to bail out of other gunmakers while the retailer Dick’s Sporting Goods said it would stop selling military-style rifles.
The activity comes as the political winds appear to be shifting. Some Republicans now say they’re willing to discuss the issue of gun control — along with mental health issues and violent video games,
Cerberus cobbled Freedom Group together by buying Bushmaster, Remington, and other well-known gun brands starting in 2006. On Friday, a gunman using what is believed to have been a Bushmaster military-style rifle killed 26 people at Sandy Hook Elementary School in one of the worst mass shootings in U.S history.
“It is apparent that the Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level,” Cerberus wrote in announcing the planned sale. Cerberus owned 95 percent of Freedom Group, according to a year-end 2011 filing for the gunmaker on its website.
Freedom Group said it’s the largest firearms manufacturer in the U.S. It sold 1.1 million rifles and shotguns last year, along with 2 billion rounds of ammunition. Its products are sold to law enforcement and military customers, as well as retailers who sell them to hunters and gun enthusiasts.
The so-called Assault Weapons Ban that expired in 2004 restricted the sale of some types of guns like those made by Bushmaster. Freedom Group noted in its filing that new laws along the lines of the expired assault weapons ban “could have a material adverse effect on our business.”
Cerberus attempted to distance itself from that debate on Tuesday.
“We are investors, not statesmen or policy makers,” the company said in its statement. Firms like Cerberus are basically privately run pools of money that invest in companies on behalf of pension funds including those for teachers, police officers, and other institutions. “It is not our role to take positions, or attempt to shape or influence the gun control policy debate. That is the job of our federal and state legislators,” the private-equity firm said.
The sale may have been influenced by one or more of those clients. The announcement comes one day after the California State Teachers Retirement System, a large pension fund, told The Wall Street Journal that it was reviewing its $500 million investment commitment to Cerberus because of the firm’s stake in Freedom Group.
Cerberus is best known for its investment in Chrysler. It ended up walking away from that investment as the U.S. government bailed out the car company.
Money made from the Freedom Group sale will be returned to its investors, Cerberus said.
Meanwhile, Dick’s Sporting Goods Inc. said in a statement that it suspended the sale of modern sporting rifles in all of its stores. The company also removed all guns from sale and display at its store closest to Newtown.
Shares in publicly-traded gun makers were dropping for a third-straight day.
Shares of Sturm, Ruger & Co. dropped $3.74, or 8.5 percent, to $40.26 in afternoon trading Tuesday. They’re down more than 10 percent since Thursday, the day before the shooting. Shares of Smith & Wesson Holding Corp. fell 11 percent to $7.70, and are down 19.3 percent from their Thursday close.
Outdoor goods retailer Cabela’s Inc. fell $1.58, or 3.8 percent, to $39.63.
A Cerberus spokesman did not return a phone message left on Tuesday. A representative for Freedom Group could not be immediately reached for comment.

Comments

Comments closed.

High School

High school football: Hornets overpower South to secure playoff spot

Crime

Jeffrey MacDonald won’t be released despite deteriorating health

Business

Amazon warehouse workers reject union in Alabama

Nation/World

Ex-NFL player’s brain to be probed for trauma-related harm after Rock Hill shootings

Education

Duke University to require COVID vaccinations for fall term

Education

Cooper OKs bill offering K-12 students summer school option

High School

High school football: Record night for Pinckney as East cruises; Carson wins thriller in OT

Nation/World

D-Day survivor, WWII torch bearer Ray Lambert dies at 100

Nation/World

Prince Philip was always defined by role as husband of British queen

BREAKING NEWS

One dead, several injured after head-on collision in China Grove

Crime

Man, woman charged for selling drugs to undercover deputies

Crime

Blotter: Rowan County man charged with indecent liberties with children

Local

Spencer town board gets look at Park Plaza progress

Business

‘Applicant market’: Unemployment rate improving as businesses hire more workers

Local

National, local business leaders praise Salisbury’s initiative to support Black-owned operations

Nation/World

Tillis has prostate cancer surgery

Coronavirus

Adverse reactions surface from Johnson & Johnson vaccine

Nation/World

Expert: Lack of oxygen killed George Floyd, not drugs

Local

Quotes of the week

Nation/World

Biden seeks crackdown on homemade firearms

Nation/World

Victim of former NFL player’s rampage wrote of faith, life’s fragility

News

Wrongly imprisoned man gets $750,000

High School

West falls to Statesville, finishes second in NPC

Education

Middle, high school students head back to classes full time