Olin's $75 Million AMMO Deal Boosts Winchester High-Margin Push

Olin Corporation (OLN) has announced a strategic acquisition of the small caliber ammunition manufacturing assets of AMMO, Inc. (POWW) for $75 million. This deal, expected to close in the second quarter of 2025, will integrate AMMO's assets into Olin's Winchester Ammunition business, enhancing its capabilities in high-margin specialty calibers and driving immediate adjusted EBITDA accretion and expected synergies of $40 million. This acquisition aligns with Olin's long-term strategic goals and market positioning, as it expands into high-margin specialty calibers, strengthens vertical integration, and drives immediate financial benefits.

The acquisition includes AMMO's brass shellcase capabilities and its 185,000-square-foot production facility in Manitowoc, Wisconsin, built in 2022. This facility and its workforce will enhance Winchester's production capabilities, enabling greater specialization in high-margin specialty calibers. The transaction is expected to generate $15 million to $20 million of incremental adjusted EBITDA in the first year, with a payback period of less than two times adjusted EBITDA by year three.

Olin President and CEO Ken Lane stated that the acquisition aligns with Winchester's strategy of pursuing strategic, accretive bolt-on opportunities, following the 2023 White Flyer acquisition. Brett Flaugher, President of Winchester Ammunition, added that the acquired assets will enable Winchester's legacy plants to lower costs of existing high-volume products and increase their ability to participate in higher margin specialty rounds at a cost advantage.

The acquisition is expected to have a positive impact on Olin's financial performance in both the short and long term. In the short term, the immediate adjusted EBITDA accretion will contribute to Olin's operating cash flow, further strengthening its cash flow generation capabilities. In the long term, the synergies and cost advantages will likely lead to sustained improvements in Olin's financial performance, with the acquisition expected to pay for itself within a relatively short period.



In conclusion, Olin's acquisition of AMMO's small caliber ammunition manufacturing assets is a strategic move that aligns with its long-term goals and market positioning. The acquisition will expand Olin's ammunition business into high-margin specialty calibers, strengthen its vertical integration, and drive immediate financial benefits. This deal is expected to have a positive impact on Olin's financial performance in both the short and long term, making it an attractive opportunity for investors seeking exposure to the growing demand for specialty calibers in the ammunition market.