In May, a gun maker in the Czech Republic bought Colt Holding Company for $222 million.
The company, Ceska Zbrojovka Group, hopes the acquisition and the Colt brand name will provide a better position in the firearms market around the world — and even contend for some U.S. military contracts.
CZG not only bought the Colt name; the deal came with factories in the U.S. and Canada. Until recently, the company’s production primarily operated in the Czech Republic. However, this new North American footprint satisfies the U.S. military's "Buy America" requirement, and CZG believes it could lead to big business.
According to a new report from Reuters, CZG hopes to more than double the combined companies' size in just a few years, which would put it in the same league as Smith & Wesson, which had $1.1 billion in sales last year. The other leader in firearms, Sturm, Ruger & Company, did about $569 million in sales in 2020.
Colt has been around for some 175 years and is not only a supplier to the U.S. military, but the exclusive supplier to the Canadian military. Colt had been a key U.S. military supplier until 2013, when it lost the contract to supply the M4 carbine over reliability problems. The M4 is the successor to the M16, but soldiers said the M4 would malfunction and jam in dusty environments.
Before the acquisition, about 66% of CZG’s sales came from the U.S., primarily in deals with local law enforcement and private citizens. To increase sales, CZG plans to introduce and produce new non-Colt products in the U.S. and upgrade the primary Colt factory in West Hartford, Connecticut.
The company now has some 2,000 employees in Canada, the Czech Republic, Germany and the U.S.