Colt CZ Group to Acquire Synthesia Nitrocellulose for 22 Billion Crowns
One of the largest Czech defense industry companies, the Colt CZ Group, agreed on Thursday to take over Synthesia Nitrocellulose from Karl Pražák’s portfolio.
In the first phase, the Colt CZ Group will take over 51 percent of the Pardubice chemical plant, with plans to obtain the remaining 49 percent between 2028 and 2032, based on an already agreed option with a fixed valuation.
The acquisition will cost a total of 22 billion crowns, which corresponds to approximately 8.2 times the expected gross operating profit (EBITDA). The price will be paid through a combination of monetary performance and the issuance of new COLT CZ shares,with the shares representing approximately 40 percent of the purchase price.
Following the completion of the transaction, Kaprain will become the third largest shareholder of Colt CZ, holding a five to 10 percent stake.The transaction requires approval from regulatory authorities and is expected to be finalized in the first quarter of next year.
Last year,the current owner identified Synthesia Nitrocellulose of the Pardubice Society of Synthesia as one of the largest European manufacturers of energy nitrocellulose – a basic raw material for gunpowder and a key component in various types of ammunition production.
Currently,efforts are underway to increase the production capacity of SNC to meet growing market demand. Synthesia nitrocellulose is also a notable manufacturer of industrial and oxycellulose used in healthcare.
Colt CZ Group to Acquire Synthesia’s Energy Division for CZK 1.4 Billion
The Colt CZ Group has agreed to purchase the energy division of Synthesia, a move that will secure energy production and supply for its industrial complexes in Semtín and Rybnív. The transaction, valued at 1.4 billion Czech crowns (approximately $60 million USD as of August 29, 2024), will be financed through a new issue of Colt CZ Group’s ordinary shares. https://www.ceskenoviny.cz/en/news/business/colt-cz-group-to-acquire-synthesia-s-energy-division-for-czk-1-4-bln/2446111
The acquisition will occur in two phases. Colt CZ Group will initially acquire a 51% share,with the remaining 49% to be obtained under agreed-upon conditions in the medium term. Completion of the transaction is anticipated in the first half of 2026. https://www.ceskenoviny.cz/en/news/business/colt-cz-group-to-acquire-synthesia-s-energy-division-for-czk-1-4-bln/2446111
This deal follows Colt CZ Group’s 2023 acquisition of Sellier & Bellot, a Czech manufacturer of rimfire ammunition. https://www.coltczgroup.com/news/colt-cz-group-completes-acquisition-of-sellier-bellot/ The company is a global leader in the production of hand firearms.In 2023, Colt CZ Group reported sales of CZK 22.4 billion, a 50% increase compared to 2022. Net profit for the year reached CZK 1.9 billion. https://www.coltczgroup.com/investors/financial-reports/
René Holeček, through Česká zbrojovka Partners, holds a majority stake in Colt CZ Group. brazilian manufacturer CBC, from which Colt purchased sellier & Bellot, holds approximately 23% of the company. https://www.coltczgroup.com/about-us/ownership-structure/
Note: Currency conversion (CZK to USD) was based on the exchange rate as of August 29, 2024, and is subject to change.