Private equity firm Cerberus Capital Management LP said Tuesday it will sell the maker of the Bushmaster AR-15 assault rifle, one of the weapons believed to have been used last week in a Connecticut elementary school massacre that left 27 dead.
Cerberus disclosed its intent to sell its approximately 95 percent stake in gunmaker and ammunition maker Remington Outdoor Co. Inc., which does business as Freedom Group Inc., after the California State Teachers' Retirement System (CalSTRS) said Monday it is reviewing its investment in Cerberus following the tragedy at Sandy Hook Elementary School in Newtown, Conn., Reuters said.
The private equity group, which has about $20 billion under management, formed Remington Outdoor in 2006 when it bought gunmaker Bushmaster. It then combined it with other firearm and ammunition makers to form Freedom Group. Two months ago it changed its name to Remington Outdoor Co.
New York-based Cerberus, which said it is hiring a financial advisor to sell its 95 percent stake in the gunmaker, said it was "shocked and deeply saddened" by the violent deaths Friday of the victims, 20 of whom were children.
"We believe that this decision allows us to meet our obligations to the investors whose interests we are entrusted to protect without being drawn into the national debate that is more properly pursued by those with the formal charter and public responsibility to do so," the firm said in a statement.
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The suspect in the killings, 20-year-old Adam Lanza, is believed to have fatally shot his mother at the Newtown home they shared and the gone to the school where he killed 20 children, six adults and then himself.
Besides Cerberus, retail companies moved this week to distance themselves from the Bushmaster rifle.
Wal-Mart Stores Inc (NYSE:WMT) took down an informational website about semi-automatic Bushmaster rifles, Reuters said. Sporting goods chain Dick's Sporting Goods (NYSE:DKS) removed all guns from its store nearest Newtown and also suspended selling certain kinds of semi-automatic rifles nationwide.
Remington, which is based in Madison, N.C., stated in regulatory filings that it has about 3,100 employees and had sales through the first nine months of this year of $677 million, up from the year-earlier level of $564 million.