US-based ammunition and firearms provider Global Ordnance has purchased Chemring Group’s military trading business for a cash consideration of $4m.
The disposal of Chemring Military Products (CMP) follows a strategic review of the group’s Energetics portfolio. In November 2018, the company revealed plans to exit its commoditised energetics businesses in Florida and Derby.
Out of the total amount, $2.5m was paid on completion of the acquisition, while remaining payments of $1m and $0.5m will be made respectively on the first and second anniversaries of the transaction.
According to Chemring, proceeds from the sale will be used for general corporate purposes. CMP reported revenues of more than $111m and an operating profit of $10.5m for the fiscal year 2018.
Chemring chief executive Michael Ord said: “I am pleased to announce the sale of Chemring military products to Global Ordnance.
“This follows our decision to exit the commoditised energetics businesses and will enable a greater focus on our growing and differentiated positions in countermeasures and energetics, and sensors and information, and will improve the quality of the group and its earnings.”
CMP and Global Ordnance are suppliers of non-standard ammunition and weapons to the US and foreign government agencies across the globe.
Global Ordnance is a veteran-owned small business established in 2013. The US Special Operations Command and the US Army are among its clients.
As part of the acquisition deal, CMP’s staff and contracts will be absorbed by Global Ordnance.