Mystery company buying up U.S. gun manufacturers
Lined up in a gun rack beneath mounted deer heads is a Bushmaster Carbon 15, a matte-black semiautomatic rifle that looks as if it belongs to a SWAT team. On another rack rests a Teflon-coated Prairie Panther from DPMS Firearms, a supplier to the U.S. Border Patrol and security agencies in Iraq. On a third is a Remington 750 Woodsmaster, a popular hunting rifle.
The variety of rifles and shotguns on sale here at Cabela's, the national sporting goods chain, is a testament to America's enduring gun culture. But, to a surprising degree, it is also a testament to something else: Wall Street deal-making.
In recent years, many top-selling brands - including the 195-year-old Remington Arms, as well as Bushmaster Firearms and DPMS, leading makers of military-style semiautomatics - have quietly passed into the hands of a single private company. It is called the Freedom Group - and it is the most powerful and mysterious force in the U.S. commercial gun industry today.
Never heard of it?
You're not alone. Even within gun circles, the Freedom Group is something of an enigma. Its rise has been so swift that it has become the subject of wild speculation and grassy-knoll conspiracy theories. In the realm of consumer rifles and shotguns - long guns, in the trade - it is unrivaled in its size and reach. By its own count, the Freedom Group sold 1.2 million long guns and 2.6 billion rounds of ammunition in the 12 months ended March 2010, the most recent year for which figures are publicly available.
Behind this giant is Cerberus Capital Management, the private investment company that first came to widespread attention when it acquired Chrysler in 2007. (Chrysler later had to be rescued by taxpayers). With far less fanfare, Cerberus, through the Freedom Group, has been buying big names in guns and ammo.
From its headquarters in Manhattan, Cerberus has assembled a remarkable arsenal. It began with Bushmaster, which until recently was based here in Maine. Unlike military counterparts like automatic M-16s, rifles like those from Bushmaster don't spray bullets with one trigger pull. But, with gas-powered mechanisms, semiautomatics can fire rapid follow-up shots as fast as the trigger can be squeezed. They are often called "black guns" because of their color. The police tied a Bushmaster XM15 rifle to shootings in the Washington sniper case in 2002.
After Bushmaster, the Freedom Group moved in on Remington, which traces its history to the days of flintlocks and today is supplying M24 sniper rifles to the government of Afghanistan and making handguns for the first time in decades. The group has also acquired Marlin Firearms, which turned out a special model for Annie Oakley, as well as Dakota Arms, a maker of high-end big-game rifles. It has bought DPMS Firearms, another maker of semiautomatic, military-style rifles, as well as manufacturers of ammunition and tactical clothing.
"We believe our scale and product breadth are unmatched within the industry," the Freedom Group said in a filing last year with the Securities and Exchange Commission.
Some gun enthusiasts have claimed that the power behind the company is actually George Soros, the hedge-fund billionaire and liberal activist. Soros, these people have warned, is buying U.S. gun companies so he can dismantle the industry, Second Amendment be damned.
The chatter grew so loud that the National Rifle Association issued a statement in October denying the rumors.
"NRA has had contact with officials from Cerberus and Freedom Group for some time," the NRA assured its members. "The owners and investors involved are strong supporters of the Second Amendment and are avid hunters and shooters."
Soros isn't behind the Freedom Group, but, ultimately, another financier is: Stephen Feinberg, the chief executive of Cerberus.
Cerberus is part of one of the signature Wall Street businesses of the past decade: private equity. Buyout kings like Feinberg, 51, try to acquire undervalued companies, often with borrowed money, fix them up and either take them public or sell at a profit to someone else.
Before the financial crisis of 2008, scores of well-known U.S. companies, from Chrysler down, passed into the hands of private-equity firms. For the financiers, the rewards were often enormous. But some companies that they acquired later ran into trouble, in part because they were burdened with debt from the takeovers.
Feinberg, a Princeton graduate who began his Wall Street career at Drexel Burnham Lambert, the junk bond powerhouse of Michael Milken fame, got into private equity in 1992. That year, he and William Richter founded Cerberus, which takes its name from the three-headed dog in Greek mythology that guards the gates of Hades.
Today, Feinberg presides over a private empire that rivals some of the mightiest public companies in the land. Cerberus manages more than $20 billion in capital. Together, the companies it owns generate annual revenue of about $40 billion - more than either Amazon or Coca-Cola last year.
Why Cerberus went after gun companies isn't clear. Many private investment firms shy away from such industries to avoid scaring off big investors like pension funds.
Yet, in many ways, the move is classic Cerberus. Feinberg has a history of investing in companies that other people may not want, but that Cerberus believes it can turn around. When Cerberus embarked on its acquisition spree in guns, it essentially had the field to itself.
"There's much less competition for buying these companies," says Steven N. Kaplan, a professor at the University of Chicago Booth School of Business and a private equity expert. "They must have decided there is an opportunity to make money by investing in the firearms industry and trying to build a big company."
Whatever the reason, Cerberus, through the Freedom Group, is now a major player.
It has sold weapons to the governments of Afghanistan, Thailand, Mexico and Malaysia, among others, and obtained new business from the U.S. Army, including a contract worth up to $28.2 million to upgrade the M24 sniper weapon system.
Cerberus brings connections to the table. The longtime chairman of its global investments group is Dan Quayle, the former vice president. The Freedom Group, meantime, has added two retired generals to its board. One is George Joulwan, who retired from the Army after serving as Supreme Allied Commander of Europe. The other is Michael Hagee, formerly commandant of the Marine Corps.
Jessica Kallam, a spokeswoman at the Freedom Group, said executives there declined to comment for this article. Timothy Price, a managing director of Cerberus, also declined to comment.
The old Bushmaster factory in Windham, Maine, doesn't look like much. With a facade of brick and gray aluminum siding, it squats in an unassuming office park on the Roosevelt Trail.
But Cerberus representatives who arrived here in 2005 clearly saw potential. Inside, several dozen gunsmiths, working by hand, were fitting together 6,000 to 7,000 weapons a month. At the time, Bushmaster was thriving, although it had been stung by bad publicity stemming from the Beltway sniper shootings. (In a 2004 settlement with victims of the shootings and their families, Bull's Eye Shooter Supply, the store where the gun was acquired, agreed to pay $2 million, and Bushmaster agreed to pay $568,000, but they did not admit liability.)
Richard Dyke, then the principal owner and chairman of Bushmaster, welcomed the visitors from New York. A blunt-spoken Korean War veteran and Republican fundraiser, he had made a fortune himself by buying companies in trouble, including one that made poker chips. In 1976, he bought a bankrupt gun-maker in Bangor, Maine, for $241,000, moved it to Windham and later changed its name to Bushmaster. The company that Dyke bought had patents on semiautomatic weapons designed for the military and police. But he was drawn to the nascent market in military-style firearms for civilians. He saw as his customers precision target shooters, including current and former military personnel, police officers and, well, military wannabes, he says.
A Bushmaster Carbon 15 .223 semiautomatic is about 3 feet long. But, weighing in at just under 6 pounds, it is surprisingly easy to maneuver, even for a novice. It doesn't have to be recocked after it's fired: You just squeeze the trigger over and over.
"At 25 meters, if you are a decent shot," Dyke says, "you can put it into a bull's-eye that is the size of a quarter."
The Bushmaster brand began to grow in the 1980s after the company started supplying its semiautomatics to police departments. It won a much larger consumer following in the 1990s, after it landed several small military contracts.
Bushmaster was among the first to sell ordinary people on weapons that look and feel like the ones carried by soldiers. Today many gunmakers have embraced military-style weapons, a major but controversial source of growth for the commercial gun market, says Tom Diaz, a senior policy analyst at the Violence Policy Center, a research group that backs gun control.
"It's clear that the militarized stuff is the stuff that sells and is defining the industry," Diaz says.
Dyke says he's not sure why Bushmaster caught the eye of Cerberus. Whatever the case, when Cerberus came calling, Dyke, then past 70, was ready to sell. At the time, Bushmaster had $85 million in annual sales and several million dollars in debt, he says. In April 2006, he sold the company to Cerberus for about $76 million, he says, and Cerberus rented the Bushmaster plant here for five years.
The next year, Cerberus formed the Freedom Group.
Now Bushmaster is gone from Maine. Earlier this year, Dyke says, the Freedom Group notified him it was closing Bushmaster's operation in the state and moving it to a bigger plant owned by Remington, a typical consolidation play for a private investment firm looking to cut costs and increase efficiency. Remington, for its part, announced earlier this year that it was expanding its manufacturing capacity and hiring new employees to make Bushmasters.
Several months ago, Dyke started a new company, Windham Weaponry, at the old Bushmaster site and has rehired most of his former employees. But he's not planning to go head-to-head with the Freedom Group.
"It's the big gorilla in the room," he says, adding: "We don't have to do $100 million. We'd have hopes of doing $20 million."
Remington has been producing guns since 1816, when, according to lore, a young man named Eliphalet Remington made a flintlock rifle in his father's forge in Ilion Gulch, in upstate New York. By the 1870s, the brand was so popular that the company diversified into typewriters. In 2007, the Freedom Group swooped in and bought Remington for $370 million, including $252 million in assumed debt. In one stroke, the Freedom Group gained one of the most famous names in U.S. firearms, the largest domestic maker of shotguns and rifles and a major manufacturer of ammunition.
"That caused a lot of stir in the industry," says Dean J. Lockwood, a weapons systems analyst at Forecast International, a market research firm.
Next, the Freedom Group in rapid succession went after other firearms companies: DPMS; Marlin Firearms, a classic maker that came with two niche shotgun brands, Harrington & Richardson and L.C. Smith; and Dakota Arms. The Freedom Group also bought S&K industries, which supplies wood and laminate for gun stocks, as well as the Advanced Armament Corp., which makes silencers. It acquired Barnes Bullets, which makes copper-jacketed bullets popular with precision shooters and police departments.
The more the company diversifies its portfolio, analysts say, the more it has to offer to firearms distributors and leading retailers like Wal-Mart and Cabela's. - sfgate
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E.T. Started Out As Dark Alien Attack Movie
Classic family film E.T. The Extra Terrestrial started out life as a creepy alien abduction movie about a farm family who are visited by "spindly grey aliens".
Movie mogul Steven Spielberg admits the beloved 1982 film was initially based on real Ufo encounter stories in Kentucky, and it only became a family film when Harrison Ford's then-girlfriend Melissa Mathison agreed to rewrite the screenplay.
He says, "It was going to be called Night Skies, based on a piece of Ufo mythology... where a farm family reported little spindly grey aliens attacking their farm, even riding cows in the farmyard. This farm family basically huddled together for survival... It's a story that's well-known in the world of ufology, and we based our script on that story."
Spielberg tells Entertainment Weekly magazine he even commissioned celebrated effects designer Rick Baker to create the aliens, but everything changed when Mathison agreed to come on-board.
He recalls, "Melissa didn't want to write it. I needed Harrison and all of us to talk her into it." - contactmusic
E.T. The Extra-Terrestrial [Blu-ray]
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Psychic: 'Natalie Wood Was Killed By Mystery Lover'
A longtime pal and ex-boyfriend of tragic actress Natalie Wood has added a new twist to the star's ongoing 1981 drowning death investigation - he believes she was killed by a mystery former lover.
Celebrity seer John Cohan, who wrote about his friendship with Wood in his book "Catch a Falling Star", was planning to reveal the truth about what he thinks happened to the actress on the last night of her life in a sequel.
However, he is so upset about the latest round of allegations following the re-opening of his friend's death investigation he is speaking out now.
Cohan claims Wood's former lover, who she called Stinger, had threatened to tell her husband Robert Wagner about their affair - and he was "close by" on the night she died.
When the case was initially closed, it was ruled that Wood accidentally fell overboard from her husband's boat miles out to sea off the coast of California after a boozy night with Wagner and the couple's guest, actor Christopher Walken.
But Cohan tells WENN, "Anyone can clamber onboard a boat and then leave. I believe Stinger came onboard and he confronted Natalie and he is responsible for her death."
The psychic claims Wood had been madly in love with the "blue-eyed, blond-haired" hunk but he turned on her towards the end of a year-long romance and threatened to go public with the affair if Wood didn't pay him a small fortune.
Cohan adds, "Stinger was someone very important to Natalie. Our mutual friend, Roddy MCDowell, told me he had died of Aids many years after she did. That's all I know. I never asked for his identity. I didn't want or need to know. of his death.
"I am coming forward now because I feel I have a mission of love. I'd like to let people know the mindset of my Nat. She was so together in the end, a very bright woman. She did not slip overboard to her death or take her own life even though she wasn't happy with R.J. (Wagner).
"And all this talk about an argument between R.J. and Natalie over a romance with Christopher Walken is nonsense. There's no way they were involved. I stake my reputation on it. Natalie thought of Chris Walken as a buddy, which she firmly told me."
Cohan is convinced he has the story of his friend's death spot on, because he claims Wood has confirmed his theory during visitations from beyond the grave.
He adds, "Natalie's visitations confirmed what Roddy always said to me too - Stinger went both ways in the latter years, women and men.
"I am hoping that this revelation takes the investigation to another point and helps to clear Robert Wagner's name. He was not a saint but he did not kill Natalie, as has been suggested. They're making him into something he's not.
"Someone came onboard the boat in the middle of the night when Christopher Walken and R.J. were out of it. There were no eyewitnesses. So much has been made of an argument earlier in the evening. That had nothing to do with Natalie Wood's death." - contactmusic
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Organic Entity - Kingston, Ontario
7/10/2009 - unedited: I was at a cottage in the 1000 islands region near Kingston, Ontario and experienced seeing something very abnormal in the sky. I was sitting on a dock over looking a lake when the object appeared from across the lake and moved towards the dock. The object can only be described as an organic looking connected formation of lights that hovered about 100 feet above the lake. The object moved towards my location initially then moved to the right slowly, while at the same time it changed shape and colour. I remember seeing red, purple, green ,orange and blue. The object's reflection could clearly be seen in the dark lake. At one point the object even seemed to form a face and arms. It was not a craft or ship of any time was certainly not man made. But it was clearly glowing and and a defined image. It kept moving right before it dropped below the tree line and disappeared. There were two other witnesses with me, and one of my friends was able to capture several photos.
I have attached one of the photos that I have, and if you think that this is something interesting I can get the other photos by contacting my friend.
It was nothing like I have seen or heard of before. It was not a fire work because it hovered for several minutes before vanishing. I was a little bit frightened when viewing the objects but my friends were laughing and kept saying, "It's not going to hurt us." They didn't seem to be afraid at all.
Any information of this sighting would be greatly appreciated. - MUFON CMS
The Canadian UFO Report: The Best Cases Revealed
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Smoking is hazardous to your nipples
Anthony Youn, M.D., is a plastic surgeon in Metro Detroit. He is the author of "In Stitches"
,a humorous memoir about growing up Asian American and becoming a doctor.I cringe every time I see a patient for a breast lift who is a smoker. I’m deathly afraid that despite my warnings, she will smoke before or after surgery and cause her nipples to turn black and fall off.
Yes. Smokers who undergo breast lifts are at great risk of losing their nipples.
I’ve seen it before.
The nicotine in cigarettes and the carbon monoxide contained in cigarette smoke can diminish blood flow to various parts of the body. These toxins act as a virtual tourniquet. If the blood flow to a particular body part becomes greatly reduced or halted, that body part dies.
In my memoir “In Stitches,” I told the story of a smoker whose nipples turned purple while undergoing a breast lift surgery. Purple is the precursor to black. Black is the precursor to falling off. To save the patient—and her nipples - we turned to the only treatment available.
We went medieval.
We used leeches.
Because of the mechanics of blood flow, when the blood supply is inadequate, which occurs with smoking, the tiniest veins often fail. This insufficiency results in a backup of old (venous) blood in the body part, causing it to turn purple. If the backup of old blood is serious enough, the purple color may eventually turn black. That’s when we know the body part - toe, finger, or nipple - is dead.
We use leeches to literally suck out the excess venous blood from the body part, acting as an attachable vein. The leech drains the old blood, causing it to turn from unhealthy purple back to healthy pink. We place leeches intermittently until the body part grows new blood vessels to do the leeches’ work. This can take several days.
Not long ago, during a consultation for a breast lift, a patient, Susan, admitted to being a pack-a-day smoker. I informed her that smoking can cause difficulty in healing and instructed her to quit smoking at least one month before surgery and to stay off cigarettes for at least a month afterward. Several months later, when she arrived at the hospital for her breast lift, she smelled like an ashtray.
“Susan, I thought you quit smoking.”
“I did. OK. For a while. It’s really hard to quit, Dr. Youn.”
“I know,” I said. “But this is a big deal. There could be major healing problems if you smoke before or after surgery.”
“I understand. But I want to go ahead with the surgery anyway. It’ll be fine.”
She wasn’t hearing me. I needed to get through to her. “Susan, listen to me. If I operate on you, your nipples could turn black and fall off.”
Her eyes widened. “You mean… I’d have no nipples?”
“No nipples. That’s what smoking can do.”
Susan flushed. She raised her voice. “Dr. Youn, I took a week off work for this surgery. I had to put my whole life on hold for an entire week. If you told me I’d lose my nipples from smoking, I would’ve quit for good. This is your fault.”
Yes. Seriously. Susan blamed me for the inconvenience.
Thanks to her, I’ve changed my policy. In addition to the Surgeon General’s Warning that appears on cigarette packages, I now offer the Plastic Surgeon’s Warning to all my patients who smoke: If you are having a breast lift or reduction and you smoke, your nipples could turn black and fall off. If you are having a tummy tuck and you smoke, you may get an infection resulting in a big gross open wound that will take three months to heal. If you are having a facelift and you smoke, the skin of your cheek could turn black and slough off, leaving exposed fat.
Imagine yourself looking like “Two-Face” from “Batman: The Dark Knight.”
And do you really want me to reach for the jar of leeches?
Smokers, you have been warned. - thecharts
