Remington buys AAC

[Telperion]

http://www.aacblog.com/

One of the most recognized brands in the firearms business is now a manufacturer of silencers.

[justin_5585]

Good, more money in the industry to push for tax stamps in California. Now we just need Winchester to buy Gemtech!

[Black Majik]

Good, more money in the industry to push for tax stamps in California. Now we just need Winchester to buy Gemtech!

I like the way you think!

[yellowfin]

This is HUGE if they play this the right way: to get the mainstream gun owning community to learn about and buy suppressors, to undo the damage of 1934. The single biggest obstacle to taking on the NFA is that too many gun owners believe NFA items are totally illegal and inaccessible, so they don't know to ask for what they think they can't have in the first place. This is no accident, as Class 3 dealers are comparatively rare and out of sight and NFA process comparatively unknown. It's expensive, obscure, and isolated. I really, REALLY hope Remington will want to reverse these problems. If they do, we will see monumental growth in firearms ownership and enjoyment if suppressors are brought to the masses. That loud, inconvenient, scary thing your wife/girlfriend/sister/cousin/neighbor/classmate doesn't want to do because it's loud, scary, and awkward won't have to be loud, scary, and awkward anymore.

[freakshow10mm]

Here's my take:

Remington is after large military contracts. Right now AAC is the number one manufacturer of suppressors in the country (they made 3,500 cans in 2007 alone) and they are the number one suppressor manufacturer supplying the military with cans. They surpassed Knight's Armament (makes less than 500 guns/cans a year) and Gemtech with ease. AAC is now the industry standard and they also set the military standard for materials and processes: Inconel 718 blast baffle, 300 and 400 series stainless steel, 100% welds with robotic welding machines, fast attach systems, .5 MOA POI shift between suppressor mounted/unmounted.

Remington supplies the military with sniper weapon systems and some combat shotguns. Remington has watched the military buy more and more suppressors from companies like AAC and DeGroat Tactical for their clandestine operations and SOCOM operations amongst the Navy, Army, and Marines. Look at who wins the contracts: AAC 9/10 times. Remington wants a piece of the action to boost their sales and take over positioning in that market, since that market is now coming to life now that the NFA tax is more of a nuisance than a prohibition thanks to inflation. Civilian silencer development, both from Class 2 SOTs like AAC and normal Form 1 builders inspiring Class 2s has seen a surge in the last 5 years especially.

Quite a story for AAC, who started as a small company in Georgia outsourcing all their manufacturing to a machine shop in California who marked AAC's name on the tubes. Now they are top dog in the suppressor industry. If that ain't the American dream, I don't know what is. Underdogs to big dogs. Bravo AAC. Go getcha some!

[yellowfin]

If just one percent of firearms owners bought suppressors in a year that'd be $900 million in new American made products sold. Can you think of anything we need more than that?

[freakshow10mm]

3 million people buy a suppressor at a $200 tax per can gives the government $600 million dollars in tax revenue plus 11% Federal Excise Tax on the selling price of each suppressor. Say a $250 rimfire can yields $27.50 in taxes (not to mention sales tax to the state) so 3 million rimfire cans will be $600 million in transfer tax revenue plus $82.5 million in excise tax plus an average of 30% profit margin on the sale of the can at 15.3% income tax on the corporation is $34.425 million in income tax revenue. Total revenue of $716.925 million in total revenue for the government. Idiots!

[yellowfin]

Wow, with that kind of revenue stream you'd think the federal government would force California, New York, New Jersey, et al. to legalize suppressors!

[Nodda Duma]

Good explanation, although 3500 suppressors / year wouldn't seem to be a big enough impact on Remington's bottom line to make them want to acquire AAC solely for the government contract. Remington must be looking at the wide open untapped civilian market as well. I think AAC is, also. I kind of get the impression that volume production and supply was holding AAC back. Remington's supply infrastructure and added manufacturing capability purchased with the merger dollars will help that issue. This may be what's needed to make silencers "mainstream." This could be an opportunity to tap into the European market as well? Dunno about that but it's possible.

-Jason

Here's my take:

Remington is after large military contracts. Right now AAC is the number one manufacturer of suppressors in the country (they made 3,500 cans in 2007 alone) and they are the number one suppressor manufacturer supplying the military with cans. They surpassed Knight's Armament (makes less than 500 guns/cans a year) and Gemtech with ease. AAC is now the industry standard and they also set the military standard for materials and processes: Inconel 718 blast baffle, 300 and 400 series stainless steel, 100% welds with robotic welding machines, fast attach systems, .5 MOA POI shift between suppressor mounted/unmounted.

Remington supplies the military with sniper weapon systems and some combat shotguns. Remington has watched the military buy more and more suppressors from companies like AAC and DeGroat Tactical for their clandestine operations and SOCOM operations amongst the Navy, Army, and Marines. Look at who wins the contracts: AAC 9/10 times. Remington wants a piece of the action to boost their sales and take over positioning in that market, since that market is now coming to life now that the NFA tax is more of a nuisance than a prohibition thanks to inflation. Civilian silencer development, both from Class 2 SOTs like AAC and normal Form 1 builders inspiring Class 2s has seen a surge in the last 5 years especially.

Quite a story for AAC, who started as a small company in Georgia outsourcing all their manufacturing to a machine shop in California who marked AAC's name on the tubes. Now they are top dog in the suppressor industry. If that ain't the American dream, I don't know what is. Underdogs to big dogs. Bravo AAC. Go getcha some!

[freakshow10mm]

Good explanation, although 3500 suppressors / year wouldn't seem to be a big enough impact on Remington's bottom line to make them want to acquire AAC solely for the government contract. Remington must be looking at the wide open untapped civilian market as well. I think AAC is, also. I kind of get the impression that volume production and supply was holding AAC back. Remington's supply infrastructure and added manufacturing capability purchased with the merger dollars will help that issue. This may be what's needed to make silencers "mainstream." This could be an opportunity to tap into the European market as well? Dunno about that but it's possible.

-Jason

They are using AAC's foot in the door as a way to dominate that market in the military contracts much like ATK does with ammunition and munitions, General Dynamics does with rockets and launchers, etc.

The civilian market is saturated with Class 2 SOTs making suppressors but there is still a lot of room for innovation and market share. AAC dominates the military market, the civilian market, and the LE market. Gemtech is number 2 in each of those markets. They used to be number one but AAC's leadership, quality, and marketing have put them on the top of the mountain.

The civilian market is definitely the prime target as that market is what carries the entire firearms industry in the country. No other market segment in the world compares to the American civilian (non military, non LE) firearms and ammunition market.

I don't think supply or production was or is holding AAC back. If you look at the number of firearms that the Class 2 SOTs made in 2007 (latest published numbers available from ATF) you will see the revered KAC didn't do squat compared to AAC. KAC made some 450 odd guns (including M16, silencers, and SBRs) when AAC only makes silencers and made about 3500 of them.

Merger for AAC means access to Remington's deep pockets for R&D. Silvers (head of R&D for AAC and owner of Silencertalk.com forum) will have almost unlimited funds at his disposal. Kevin will be answering to someone now, which will be a change for him. With Remington's manufacturing processes, supply buying power, marketing power coupled with AAC's marketing power, product innovation, and household name in the industry, it can only mean good things to come, IMO.

The foreign silencer market is dead. US is the only country to regulate silencers like they do. Many countries, even France, Finland, Germany, and the UK have little to no laws or regulations on suppressors. Finland encourages their use. Remington isn't after international sales. They are after civilian, LE, and military sales in the US market.

[Nodda Duma]

So AAC gets R&D dollars and Remington gets into the defense industry market. Makes sense.

-Jason

[freakshow10mm]

I'd love to see the look on LaRue's face now.

[Pvt. Cowboy]

Call me a pessimist, but I think I'd better get my AAC cans serviced or something before Remington restricts warranty work to LEO/Military only.

[freakshow10mm]

According to the AAC guys on Silencertalk, Remington is basically letting AAC run as usual but they are more or less the financing arm of it. Remington is the money and buying power. AAC is the brains and grunt work. Remington gets a cut of the profits off the top. December 1st AAC moves to a bigger facility 10 miles up the road that Remington bought for them a couple months ago.

Pvt Cowboy, I agree.

[Pvt. Cowboy]

Sad thing is that I'd hoped that I'd never ever have to deal with those douchenozzles again as long as I lived.

Now look.