Let me see if I can lend some perspective:
In August of 2017, Clarus Corporation (NASDAQ:
CLAR), a diversified holding company which seeks opportunities to acquire and grow businesses that can generate attractive shareholder returns, has completed the acquisition of Sierra Bullets, L.L.C. for $79 million
For the unaudited 12 months ended June 30, 2017, Sierra's total revenues were approximately $32 million with EBITDA of approximately $12.5 million, representing a purchase price multiple of approximately 6.3x EBITDA. Sierra has a strong cash flow profile, generating free cash flow conversion of approximately 95% with limited ongoing capex requirements.
Now, here's the important part:
Clarus expects to leverage its various strategic and financial resources
to accelerate Sierra's growth. This includes investments to enhance marketing and digital capabilities, improve distribution, forge new customer accounts, and
develop new products.
Sierra is led by a seasoned senior management team with decades of combined manufacturing and industry expertise that is dedicated to the long-term growth of the brand.
All senior management are expected to remain with Sierra under Clarus' ownership.
So, it would seem Clarus, a holding company, acquired Sierra for its high profitability, low debt, huge cash generating capabilities and as a platform for growth. I will tell you this from experience, a 39% EBITDA is something you don't come in and jack with by telling them how to manufacture bullets. You do exactly what they state their strategy is: to grow the top line revenue and let that management team keep doing what they are doing