A Bushmaster rifle belonging to Sandy Hook Elementary school gunman Adam Lanza in Newtown, Connecticut is seen after its recovery at the school in this police evidence photo released by the state's attorney's office November 25, 2013 (Photo: Reuters)
US private equity firm Cerberus Capital Management is struggling to sell gunmaker Freedom Group one year after pledging to sell its stake in the company in the wake of the infamous Sandy Hook shootings of December last year.
According to media reports, Cerberus is now close to bringing in a minority investor and lender to let some of its investors exit Freedom Group.
The alleged new deal includes a $200m (£122m, €146m) credit facility, valuing the business at around $1.2bn. Cerberus originally sought around $1bn for the business overall.
Cerberus will not sell its stake alongside those of its fund investors under the new debt plan.
According to market-research firm IBISWorld, revenue from gun and ammunition manufacturing is expected to rise 20% in the US this year to $14bn.
Cerberus, Freedom and Sandy Hook
Cerberus invests under four primary strategies: distressed securities & assets; control and non-control private equity; commercial mid-market lending; and real estate-related investments.
Cerberus bought Bushmaster in 2006 and then created the Freedom Group which, through acquisitions, has become one of the largest gun makers in the US.
Only four days after Adam Lanza used a Bushmaster rifle, which was manufactured by the Freedom Group, to kill 20 children and six staff members at the Sandy Hook Elementary School in Newtown Connecticut, Cerberus said it would sell its stake in the gunmaker.
At that time, Cerberus said in a lengthy statement, that Freedom Group does not sell weapons or ammunition directly to consumers but only to federally licensed firearms dealers and distributors in accordance with applicable laws and regulations.
It also added that it "does not believe that Freedom Group or any single company or individual can prevent senseless violence or the illegal use or procurement of firearms and ammunition."
According to the report's sources, Cerberus has not reached an agreement with a buyer as the sales process has been complicated by several factors such as other high-profile shootings and financing issues for some possible bidders..
Meanwhile, Freedom has reported a 46% surge in revenue for the quarter through September year-on-year.
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