For the most part, Smith & Wesson and American Outdoor Brands are fairly synonymous, at least as far as the firearm community is concerned. After all, AOB is the parent company of Smith & Wesson.
However, it seems that won’t be the case for too much longer.
American Outdoor Brands Corporation’s board of directors announced on Wednesday that it will separate its firearm business – Smith & Wesson – from its outdoor products and accessories business.
The split, expected to be completed in the second half of 2020, will be carried out as a tax-free stock dividend to stockholders. The two remaining standalone companies – Smith & Wesson Brands and American Outdoor Brands – would also be independent publicly traded companies.
The company’s chairman cited changes in the political climate as part of the motivation for the move.
“There have been significant changes in the political climate as well as the economic, investing, and insurance markets since we embarked upon what we believe have been our very successful diversification efforts,” Barry M. Monheit said in a statement. “We believe that separating into two independent public companies will allow each company to better align its strategic objectives with its capital allocation priorities.”
The firearm industry has spent the last almost two years under siege as governmental entities such as the State of New York have pressured other industries such as banking to sever ties with gun manufacturers. With a company like American Outdoor Brands, that could impact all of their other subsidiaries.
If that’s the case, spinning Smith & Wesson back off to be its own company might make a great deal of sense.
What remains to be seen is if this will create any real hardship for the new Smith & Wesson brand. Frankly, I’m inclined to think they’ll do just fine. In addition to the venerable line of revolvers that made them famous, they also have the M&P line of semi-automatic pistols and AR-15s that are extremely popular. All of that together is a recipe for success that should see them in good stead.
Unless, of course, they run into banking trouble like so many others in the gun industry.
So far, though, those issues have seemingly been relegated to the smaller companies. They haven’t hit the bigger gun makers yet and hopefully, that pattern will continue for the foreseeable future.
If not, well, it’s Smith & Wesson. I suspect they’ll still end up just fine.
Their biggest problem is likely to be activist investors, those who invest in an effort to try to steer a company toward certain political ends. Of course, these investors only represent a vocal minority, but they’re organized and are able to pressure companies into wasting time with stupid things like studies into what they can do to keep bad people from getting their guns despite manufacturers not selling directly to anyone in the first place.
It’s likely that they represent no real power with the ranks of investors, only a mild annoyance. They can’t actually force the company to stop selling guns to civilians or anything.
As for Smith & Wesson’s future, it should be interesting to watch. It might also be a good idea to pick up any Smith & Wesson you’ve been eyeing, just to let the company know you’ve still got their back.