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Colt Defense purchases Diemaco

ramy

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An interesting article I just found.


Heroux-Devtek to sell its Logistics & Defence Division, Diemaco to Focus on Aerospace and Industrial Products
2/10/05     

KITCHENER, Feb 10, 2005 (CNW Telbec via COMTEX) --
Heroux-Devtek Inc. (TSX: HRX), a leading Canadian manufacturer of aerospace and industrial products, announced today the execution of an agreement with Colt Defense LLC of West Hartford, Connecticut for the sale of its Logistics & Defence Division, Diemaco. The basic sale price was established at $16.5 million, subject to certain working capital adjustments.

Diemaco is a world class defence manufacturer with a reputation for providing innovative, state-of-the-art small arms solutions, for military and law enforcement forces. Heroux-Devtek acquired Diemaco in 2000, as part of its merger with Devtek Corporation. Sales at Diemaco for Heroux-Devtek's fiscal year ended March 31, 2004 were $20.5 million, and $13.9 million for the first nine months this current fiscal year. The unit is profitable and currently employs 100.

"While Diemaco has prospered under the Heroux-Devtek umbrella, a strategic buyer such as Colt is more beneficial for the future development of the operation as well as for its customers," stated Heroux-Devtek's President, Gilles Labbe. "This is a logical step in our evolution, as we plan, in the future, to focus more on our core competencies in aerospace and industrial products."

The transaction is subject to certain regulatory and governmental approvals and other customary conditions. Closing is expected to occur within the next few months.

This follows the acquisition, last April, of Dallas-based Progressive Incorporated, a manufacturer of large structural components for military aircrafts, which represented the first step in this direction.

Colt Defense Profile

Colt Defense LLC is an American company tracing back its origins to the company founded by Samuel Colt, an American icon, in 1836. Colt Defense products command a global presence as the weapons of choice for military and law enforcement use in over 80 countries worldwide. Colt is the owner of the technical data packages for the M16 and M4 families of weapons. The M4 carbine is the mainstay of the U.S. Armed Forces. Over 8 million M16 and M4 weapons have been installed all over the world. Colt Defense is a privately held company.

Profile

Heroux-Devtek Inc., a Canadian company, specializes in the design, development, manufacture and repair of aerospace and industrial products. The Company's head office is located in Longueuil, Quebec. Heroux-Devtek operates nine business units grouped under four divisions: the Landing Gear Division, the Aerostructure Division, the Gas Turbine Components Division and the Logistics and Defence Division. 75% of the Company's sales are outside Canada, mainly in the United States. Heroux-Devtek's shares trade on the Toronto Stock Exchange under the symbol HRX.

    Forward-looking statements
    Except for historical information provided herein, this press release may    contain information and statements of a forward-looking nature concerning    the future performance of the Company. These statements are based on    suppositions and uncertainties as well as on management's best possible    evaluation of future events. Such factors may include, without excluding    other considerations, fluctuations in quarterly results, evolution in    customer demand for the Company's products and services, the impact of    price pressures exerted by competitors, and general market trends or    economic changes. As a result, readers are advised that actual results    may differ from expected results.
VIEW ADDITIONAL COMPANY-SPECIFIC INFORMATION: http://www.newswire.ca/en/releases/orgDisplay.cgi?okey=32545

For further information: Heroux-Devtek Inc.: Gilles Labbe, President and Chief Executive Officer, (450) 679-3330; Maison Brison: Rick Leckner, (514) 731-0000

Copyright (C) 2005 CNW, All rights reserved

 

basxav

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Hi all:
I heard on the news that Colt has bought Diemaco. Any thoughts? Could Colt simply close Diemaco and produce the Canadian variant of the M16 family in the States? Or is that unlikely?

xavier
 

Kal

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I highly doubt they would close Diemaco.  I'm not really sure if it's a great thing for the company as a whole or for Canada and our armed forced.  I could see, however, Colt redesigning some of the components of the M-16 to C7 specs. and some of the components on the C7 to M16 specs.  Perhaps the C7 family will get a 7 position stock and ditch the triad and thermelt mags.  Maybe both rifles will remain unchanged.  I don't like the fact that it isn't 100% Canadian owned and operated company anymore, though.
 

Nicholas Cressman

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I would hope that the purchase means the opposite, that Colt liked what they saw in the Diemaco variants (ie. C7, C8, etc.) and bought the company so that they can use the design.

Wishful thinking, I know.

Nic
 

basxav

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Hi all:
Thanks for your comments. I'm also leery about Colt's purchases. Guess we'll have to wait and see.
Kal:
Could you clarify by what you mean by the  triad? Is that the rail additions to the C7A2?

Thanks again!

xavier 
 

KevinB

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Diemaco was already a COLT licencee - and did COlts european sales - as well as subcontracting parts from Colt.

Diemaci has been losing money for years - and DevTek-Heroux (an Aerospace Company) had been tryign to sell it off prior. 

This is the first I heard of it and I figured I would have hear drumblings at SHOT - but either way it will likely be better for the CF as a whole.


 

Kal

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Basxav - Triad meaning the mounting rails on the C7A2.  Something more along the lines of the KAS RAS.
Blakey - Aware that the plastic mags haven't been used in years, but that doesn't mean Diemaco hasn't stopped making them......
 

basxav

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Kal & CFL:
Thanks!

KevinB:
How will it be better for Colt buying Diemaco? Canadian soldiers  using even better rifles?

Thanks again all!
xavier
 

KevinB

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I can't see Colt putting their stamp on the POS TRIAD-1 mount...

Colt also does not seem (looking at boths pricing) to try and bleed out their clients fiscally.

Kal was correct that we hope it means the RAS on guns, rather than the crack in the cold (yes its happend) and lest put my really expensive IR laser/illuminator out front where it can take all the abuse, TRIAD.




 

KevinB

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Well when I am a civie I am going to do weapon critiques and boondoogles for Scott Taylor  ;D

But who am I kidding - if the $10 million dollar boot sole fiasco did not phase anyone why woudl a few hundred thousand dollars of N/S lasers...
 

basxav

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SBaker:
O no I have no intention of restarting that silly debate. ;)  Rather I was curious if Diemaco- and the Canadian soldier- would benefit from some of Colt's good design implementations and vice-versa. Thus Canadian soldiers would possess an excellent rifle. From what I understand the triad rails on the C7A2 are  ill-advised and it would be far better to adopt a proper railing system as on the American variants.

xavier
 

1feral1

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I was reading on www.colt.com today that Colt bought Diemaco from its parent company based in (Heroux-Devetek) Quebec. Diemaco will be called Colt Canada Corp. This all was back on 10 Feb 05.

Anyways this is old news, but its new to me.

Cold beers,

Wes
 

Cpl.Banks

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ARRRGGGGG! another prime example of foreign markets buying up Canadian company's, I dont like it at all, considering that the U.S own alot of our companines including *tear* Tim Hortons! I know this isnt a post about Canada's soverignty but I still cant help saying it why do we let ourselves be bought out and americanized?! gahhh ill open a post lol...
UBIQUE!!!!! :cdn: :cdn: :cdn:
 

KevinB

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::)

Cadet-Cpl. Banks I rather it be American than French...


 

Redeye

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Cpl.Banks(Cdt.) said:
Whats wrong with french people/companies? :mad:

Better question - what difference does it make who owns Diemaco (or any other firm)?
 
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