| NEW YORK
NEW YORK Dec 9 Freedom Group Inc proposed on
Monday to raise $225 million in debt and equity to help buy out
some of private equity firm Cerberus Capital Management LP's
investors, in a deal that values the controversial gun maker at
around $1.2 billion.
An undisclosed financial institution has offered Freedom
Group a seven-year $200 million loan as well a $25 million
equity investment, according to people briefed on a conference
call with financiers held on Monday.
Cerberus is also exploring other ways to raise cash in order
to buy out fund investors no longer wishing to own Freedom
Group, maker of the Bushmaster rifle used in the Newtown,
Connecticut school shooting rampage, the people said.
The sources asked not to be identified because the
conference call was private. Cerberus declined to comment.
The move comes a year after the New York-based private
equity firm said it would sell Freedom Group, a pledge that was
made four days after 26 people, most of them children, were
killed at the Sandy Hook Elementary School in Newtown.
Freedom Group itself has posted bumper profits so far this
year. Nine-month net sales to the end of September were $1.02
billion, up 51 percent year-on-year, while nine-month net income
was $94.2 million, up from just $300,000 a year ago, according
to the company's latest earnings statement.
Cerberus founder and CEO Stephen Feinberg dropped plans last
summer to offer to buy Freedom Group on expectations that
another buyer would emerge and would be willing to pay enough to
the investors so that they would have to sell below market
value, people familiar with matter said in July.