Remington Outdoor, a maker and dealer of guns and other arms that's been mired in controversy under the ownership of Cerberus Capital Management, has officially filed for Chapter 11 bankruptcy protection. The company first announced plans for the restructuring last month, reaching an agreement to cut its debt load by some $700 million and inject the company with $145 million in new capital. The latest filing occurred Sunday night, a day after marches in favor of gun control took center stage across the US.
The bankruptcy plan will allow Remington to continue operating and lists liabilities of between $100 million and $500 million. Earlier reports had indicated nearly $1 billion in debt. Remington was founded in 1816 and purchased by Cerberus in 2007, part of a deal that combined the company into a larger entity called Freedom Group.
Cerberus first sought an exit from the company nearly a decade ago, filing for an IPO in 2009, but Freedom Group pulled the offering in 2011 after a reported decline in sales. Cerberus again tried to break off its investment in 2012, after a shooter used one of Remington's products to murder 20 children and six adults at Sandy Hook Elementary School in Connecticut, but the firm didn't find a buyer.
While the number of firearm background checks conducted in the US rose steadily between 2007 and 2016, according to FBI data—a statistic that's frequently used as a proxy for gun sales, which aren't tracked—the number of background checks dipped significantly in 2017. It's possible a concurrent decline in sales for Remington made it increasingly difficult to meet its hefty debt obligations.
Remington becomes the latest PE-backed US retailer to file for bankruptcy. Apollo Global Management and Claire's took the plunge last week, while Bain Capital portfolio companies Toys R Us and iHeartMedia have encountered their own issues with heavy debt.
While Remington is one of the more high-profile companies in the Cerberus profile, the firm also backs several other notable businesses in the B2B and B2C spaces. Here's a brief rundown:
The firm has completed two deals so far in 2018, per the PitchBook Platform, putting it on pace for its slowest year out of the past dozen. Cerberus did, however, come to a $24 billion agreement to merge existing portfolio company Albertsons with Rite Aid. It's investing out of its Cerberus Institutional Partners VI fund, which closed on $4 billion last year.
Check out our prior coverage of the $24 billion Albertsons deal.