Olin - Winchester Completes Acquisition of Small Caliber Ammunition Manufacturing Assets

Rhea-AI Summary

Olin (NYSE: OLN) has completed the acquisition of AMMO, Inc.'s small caliber ammunition assets, integrating them into its Winchester Ammunition business. The acquisition includes a new 185,000 square foot production facility in Manitowoc, Wisconsin, along with brass shellcase capabilities and employees.

The transaction, funded from available liquidity, is expected to be immediately accretive to shareholders, with projected first-year adjusted EBITDA of $10-15 million including synergies. Once fully integrated, the acquisition is anticipated to generate $40 million in annual adjusted EBITDA with full synergy realization.

The Manitowoc facility will focus on high-margin specialty calibers, expanding Winchester's reach into higher-value commercial and international military markets while enabling legacy plants to concentrate on high-volume products.

Positive

• Immediate accretion to shareholders with $10-15M first-year adjusted EBITDA
• Expected $40M annual adjusted EBITDA post-integration
• Expansion into high-margin specialty calibers market
• Addition of new 185,000 sq ft production facility
• Enhanced vertical integration across ammunition value chain

Negative

• Additional debt burden from acquisition funding
• Integration risks and execution challenges
• Exposure to market cyclicality in ammunition sector

Insights

Financial Analyst

Olin's ammunition assets acquisition adds $10-15M first-year EBITDA, scaling to $40M, representing excellent value at projected 1.5x EBITDA multiple.

Olin 's completed acquisition of AMMO Inc.'s small caliber ammunition assets demonstrates a disciplined capital allocation approach that should create immediate shareholder value. The transaction's financial profile is particularly compelling - management projects $10-15 million in incremental first-year adjusted EBITDA (including synergies), ramping to $40 million annually once fully integrated.

What makes this acquisition especially attractive is the implied valuation multiple. Management expects to have paid just 1.5x adjusted EBITDA by year three, representing an exceptional return on invested capital compared to typical industry acquisition multiples of 8-12x EBITDA. The deal structure - funded through existing liquidity rather than new debt - preserves balance sheet flexibility while delivering immediate earnings accretion.

The strategic rationale aligns perfectly with value creation principles. By specializing production facilities, Olin can optimize manufacturing efficiency while expanding into higher-margin specialty calibers. This vertical integration deepens Winchester's control over its supply chain, potentially improving both cost structures and pricing power.

This acquisition follows the same playbook as their 2023 White Flyer transaction, establishing a pattern of pursuing small, strategic bolt-on acquisitions that enhance core capabilities rather than costly transformational deals. For investors, this demonstrates management's commitment to disciplined growth and returns-focused capital deployment.

Defense Industry Specialist

Winchester's acquisition strengthens domestic ammunition production capabilities, enhances specialty caliber portfolio, and creates significant operational synergies.

Winchester's acquisition of AMMO Inc.'s manufacturing assets represents a strategic enhancement of domestic ammunition production capabilities at a time when specialized manufacturing capacity is increasingly valuable. The newly acquired 185,000 square foot Manitowoc facility provides Winchester with modern, purpose-built manufacturing infrastructure that complements its existing operations.

The acquisition's strategic importance lies in its product diversification potential. By dedicating this facility to higher-value commercial and international military/law enforcement calibers, Winchester can capture premium segments while allowing legacy plants to focus on high-volume production runs. This manufacturing specialization approach is a proven strategy in defense manufacturing that typically yields both quality improvements and cost efficiencies.

The brass shellcase capabilities are particularly significant. Brass components represent a critical manufacturing bottleneck in ammunition production, and vertically integrating this capability strengthens Winchester's supply chain resilience. This deeper integration across the ammunition value chain gives Winchester greater production flexibility during demand fluctuations.

From a competitive standpoint, this acquisition reinforces Winchester's position as a leading ammunition manufacturer with diversified offerings across consumer, law enforcement, and military markets. The synergy potential comes from applying Winchester's established projectile, primer, and loading capabilities alongside their superior raw material sourcing leverage - areas where scale advantages drive significant margin improvements in ammunition manufacturing.

CLAYTON, Mo., April 18, 2025 /PRNewswire/ -- Olin Corporation (NYSE: OLN) announced today that it has completed the previously announced acquisition of the small caliber ammunition assets of AMMO, Inc. 

The assets, employees and ammunition business are now part of Olin's Winchester Ammunition business, including the brass shellcase capabilities and a newly constructed, world-class, 185,000 square foot production facility located in Manitowoc, Wisconsin. The facility and its skilled employees complement Winchester's existing production capabilities, enabling greater specialization and broader participation across a variety of high-margin, specialty calibers.

Funded from available liquidity, this transaction is expected to be immediately accretive to Olin's shareholders, delivering incremental expected first-year adjusted EBITDA of $10 to $15 million, including synergies realization, leveraging Winchester's industry-leading economies of scale, raw material sourcing, and our projectile, primer, and loading capabilities. Once fully integrated, this acquisition is expected to yield adjusted EBITDA of $40 million per year with full realization of synergies.

"During our recent Investor Day, we committed to our capital allocation framework," said Olin's President and CEO, Ken Lane. "Like the White Flyer acquisition in 2023, this acquisition furthers our Winchester strategy to identify and secure small, bolt-on opportunities that are highly strategic and immediately accretive to Olin. By year three, we expect to have paid one and a half times adjusted EBITDA for these world-class assets."

Brett Flaugher, President of Winchester Ammunition, noted, "The specialization of the Manitowoc facility will expand our reach into higher-value commercial, as well as international military and law enforcement calibers, while deepening our near full integration across the ammunition value chain.  This shift enables our larger, legacy plants to focus on high-volume products and growing our cost advantage."

COMPANY DESCRIPTION

Olin Corporation is a leading vertically integrated global manufacturer and distributor of chemical products and a leading U.S. manufacturer of ammunition. The chemical products produced include chlorine and caustic soda, vinyls, epoxies, chlorinated organics, bleach, hydrogen, and hydrochloric acid. Winchester's principal manufacturing facilities produce and distribute sporting ammunition, law enforcement ammunition, reloading components, small caliber military ammunition and components, industrial cartridges, and clay targets.

Visit www.olin.com for more information on Olin Corporation.

FORWARD-LOOKING STATEMENTS

This communication includes forward-looking statements. These statements relate to analyses and other information that are based on management's beliefs, certain assumptions made by management, forecasts of future results, and current expectations, estimates and projections about the markets and economy in which we and our various segments operate. The statements contained in this communication that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties.

We have used the words "anticipate," "intend," "may," "expect," "believe," "should," "plan," "outlook," "project," "estimate," "forecast," "optimistic," "target," and variations of such words and similar expressions in this communication to identify such forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the Company's anticipated financial and other benefits of our acquisition of the ammunition assets of Ammo, Inc. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions, which are difficult to predict and many of which are beyond our control. Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise. The payment of cash dividends is subject to the discretion of our Board of Directors and will be determined in light of then-current conditions, including our earnings, our operations, our financial conditions, our capital requirements and other factors deemed relevant by our Board of Directors. In the future, our Board of Directors may change our dividend policy, including the frequency or amount of any dividend, in light of then-existing conditions.

The risks, uncertainties and assumptions involved in our forward-looking statements, many of which are discussed in more detail in our filings with the SEC, including without limitation the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2024, and our Quarterly Reports on Form 10-Q and other reports furnished or filed with the SEC, include, but are not limited to, the following:

Business, Industry and Operational Risks

• sensitivity to economic, business and market conditions in the United States and overseas, including economic instability or a downturn in the sectors served by us;
• declines in average selling prices for our products and the supply/demand balance for our products, including the impact of excess industry capacity or an imbalance in demand for our chlor alkali products;
• unsuccessful execution of our operating model, which prioritizes Electrochemical Unit (ECU) margins over sales volumes;
• failure to control costs and inflation impacts or failure to achieve targeted cost reductions;
• our reliance on a limited number of suppliers for specified feedstock and services and our reliance on third-party transportation;
• availability of and/or higher-than-expected costs of raw material, energy, transportation, and/or logistics;
• the occurrence of unexpected manufacturing interruptions and outages, including those occurring as a result of labor disruptions and production hazards;
• exposure to physical risks associated with climate-related events or increased severity and frequency of severe weather events;
• the failure or an interruption, including cyber-attacks, of our information technology systems;
• risks associated with our international sales and operations, including economic, political or regulatory changes;
• failure to identify, attract, develop, retain and motivate qualified employees throughout the organization and ability to manage executive officer and other key senior management transitions;
• our inability to complete future acquisitions or joint venture transactions or successfully integrate them into our business;
• adverse conditions in the credit and capital markets, limiting or preventing our ability to borrow or raise capital;
• weak industry conditions affecting our ability to comply with the financial maintenance covenants in our senior credit facility;
• our indebtedness and debt service obligations;
• the effects of any declines in global equity markets on asset values and any declines in interest rates or other significant assumptions used to value the liabilities in, and funding of, our pension plans;
• our long-range plan assumptions not being realized, causing a non-cash impairment charge of long-lived assets;

Legal, Environmental and Regulatory Risks

• changes in, or failure to comply with, legislation or government regulations or policies, including changes regarding our ability to manufacture or use certain products and changes within the international markets in which we operate;
• new regulations or public policy changes regarding the transportation of hazardous chemicals and the security of chemical manufacturing facilities;
• unexpected outcomes from legal or regulatory claims and proceedings;
• costs and other expenditures in excess of those projected for environmental investigation and remediation or other legal proceedings;
• various risks associated with our Lake City U.S. Army Ammunition Plant contract and performance under other governmental contracts; and
• failure to effectively manage environmental, social and governance (ESG) issues and related regulations, including climate change and sustainability.

All of our forward-looking statements should be considered in light of these factors. In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of our forward-looking statements.

2025-10

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SOURCE Olin Corporation

FAQ

What is the expected financial impact of Olin's ammunition assets acquisition?

The acquisition is expected to generate $10-15M in first-year adjusted EBITDA and $40M annually once fully integrated with synergies.

What assets did Olin acquire from AMMO, Inc.?

Olin acquired small caliber ammunition assets, including a 185,000 sq ft production facility in Manitowoc, Wisconsin, brass shellcase capabilities, and related workforce.

How will the Manitowoc facility benefit Olin's Winchester business?

The facility will expand Winchester's reach into higher-value commercial and international military calibers while allowing legacy plants to focus on high-volume products.

What is the strategic rationale behind OLN's ammunition assets acquisition?

The acquisition aligns with Olin's strategy for small, bolt-on opportunities that are strategic and immediately accretive, while deepening integration across the ammunition value chain.

When will Olin realize full synergies from the AMMO Inc. acquisition?

By year three, Olin expects to have paid 1.5x adjusted EBITDA for the assets with full synergy realization.