Colt CZ has announced the completion of its acquisition of a 51% stake in Synthesia Nitrocellulose (SNC). The transaction also includes the purchase of a 51% stake in Synthesia Power (SP). Colt CZ may acquire the remaining 49% under pre-agreed terms within the next few years. The acquisition was announced around the middle of last year.

The total acquisition price is CZK10b, consisting of CZK5.5bn in cash and 6,174,214 new Colt shares at a price of CZK732 (180-day VWAP) per share. Kaprain, the selling company, gained a 9.86% stake in Colt, becoming its third-largest shareholder.

SNC should significantly improve Colt's financial results. SNC's EBITDA of approximately CZK2.5bn accounts for 53% of Colt's 2025 target. The transaction multiple is 8.2x EV/EBITDA. Compared to Colt's multiple of about 11x EV/EBITDA, the transaction price is favourable.

Following the acquisition of Sellier&Bellot, the purchase of Synthesia Nitrocellulose is another significant transaction that will improve Colt's financial performance and strengthen its vertical integration. SNC is a key supplier for Colt's ammunition business.

Autor: Bohumil Trampota