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Man tries out Bushmaster rifle at 2015 NRA Annual Convention. Photo by Karen Bleier/Getty Images

Private equity firm Cerberus Capital Management is finally out of the gun-making business, a scant five years after it first tried to sell the conglomerate now known as Remington Outdoor Co.

The only wrinkle is that this particular exit is coming via bankruptcy.

We first discussed the possibility of prepackaged bankruptcy last week, based on a Reuters report, but Remington made it official yesterday.

  • Equity-holders get wiped out. First-lien lenders get 82.5% of the reorganized equity, while third-lien holders get the rest.
  • The North Carolina-based company will get a $145 million capital injection, which might partially soothe layoff fears.
  • There's also a $5 million set-aside for a litigation trust (the company is in court with some Sandy Hook families).
  • Debtwire reported last month that Cerberus had bought up some of the third-lien notes, but a source close to Cerberus insists the firm is not a current bondholder. Cerberus itself declined to comment.

Cerberus' original investment theory was that it would buy up lots of firearms manufacturers — including Marlin, DPMS, AAC, Dakota Arms, S&K and Barnes Bullets — and add them to the Bushmaster/Remington platform. It would then IPO the clear market leader, providing itself liquidity and the company a way to repay some debt.

The IPO was essential. Not only because the conglomerate was now too big to be assumed by another domestic maker (foreign companies would have faced too much regulatory scrutiny), but also because cost-savings were created via tight integrations that made piece-meal sales almost impossible.

  • But the firm's major blind spot — perhaps because Cerberus leader and Trump pal Stephen Feinberg is a recreational shooter — was that one of its weapons could be used in a mass murder, thus scaring off the sorts of large institutional investors needed to pull off that type of public offering.
  • It also missed how the election of a pro-gun president could dampen new product sales.

Remington has not yet formally filed for bankruptcy protection, but is expected to do so shortly.

Go deeper

Kendall Baker, author of Sports
27 mins ago - Sports

MLB falls out favor with Republicans

Expand chart
Data: Morning Consult; Chart: Will Chase/Axios

MLB is the latest sports league to fall out of favor with Republicans following its decision to pull the All-Star Game out of Atlanta.

By the numbers: In mid-March, MLB's net favorability rating among Republicans was 47%, the highest of the four major U.S. sports leagues. Since then, it has plummeted to 12%, dropping the league below the NFL and NHL, according to new data from Morning Consult.

41 mins ago - World

Blinken makes unannounced trip to Afghanistan to sell troop withdrawal

Photo: CARLOS BARRIA/POOL/AFP via Getty Images

Secretary of State Antony Blinken made an unannounced trip to Afghanistan on Thursday to meet with the nation's president, Ashraf Ghani, and Abdullah Abdullah, who is representing the Taliban in negotiations, per the Washington Post.

Why it matters: Blinken sought to reassure the pair that the U.S. will maintain support for the country, despite President Biden's decision to withdraw troops from Afghanistan starting May 1 and concluding in full by Sept. 11.

Women rise to the top at major media companies

Illustration: Aïda Amer/Axios

Several women have been tapped to lead some of the country's largest newsrooms over the past year — a promising sign of progress for an industry that's typically been slow to accept change and embrace diversity.

Driving the news: CBS News executive Kimberly Godwin was named president of ABC News on Wednesday. Godwin will be the first Black woman to lead a major broadcast news division when she takes the helm in May.