Cerberus, the private equity fund that nearly ruined itself by making bad bets in Detroit, particularly on Chrysler, is considering taking its gun company interests public. According to a report in The Wall Street Journal, the firm "is in advanced preparations for an initial public offering of Freedom Group Inc." The company has about $900 million in sales.
The move may be a profitable one for Cerberus. Gun company Smith & Wesson (SWHC) trades at just above $5, near the high end of its 52-week range. That gives the company a market cap of $300 million on sales of about $345 million. On a ratio-and-proportion basis, that would make Freedom worth close to $800 million.