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Aims to use experience with military customers

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CSG looks to expand Kinetic sales in Europe

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CSG revenues jumped 129% in first nine months

By Jan Lopatka

PRAGUE, Dec 19 (Reuters) - Czechoslovak Group (CSG) will

seek higher military sales at U.S. small-calibre ammunition

maker Kinetic after completing a $2.2 billion takeover last

month, a board member told Reuters.

CSG, owned by Czech billionaire Michal Strnad, has grown

fast as militaries in NATO countries, Ukraine and elsewhere buy

more artillery ammunition, artillery and rocket-launcher

systems, trucks, refurbished tanks, as well as hi-tech

equipment.

CSG, whose revenues jumped by 129% in the first nine months

of 2024 to $2.52 billion on the back of soaring demand, bought

Kinetic from Vista Outdoor in an all-cash deal in November.

The acquisition boosts CSG's small-calibre ammunition

business with brands including Federal, Remington, Speer and

HEVI-Shot. It also delivers about $1.5 billion in annual sales

and more than $416 million in earnings before interest, tax,

depreciation and amortisation in the fiscal 2024, CSG said.

David Stepan, CSG board member and CEO of its Ammo+

division, said the company would take advantage of its existing

footprint and European presence to add customers for Kinetic.

"The largest opportunity is in the military segment, that

was a wholly fringe interest for Kinetic," Stepan told Reuters,

adding: "There is opportunity stemming from our partnership with

NATO and NATO-allied countries and beyond."

Kinetic's focus on non-military ammunition was partially due

to it formerly being part of a publicly-listed company, a

limitation that private ownership removes, Stepan said.

CSG was happy to retain Kinetic's management, which has been

delivering EBITDA margins above rivals of 20-25%, he added.

Stepan said CSG was not planning to lay off any Kinetic's

3,800 staff, while existing spare capacity offered room for

growth without making any major investments.

In 2022, CSG acquired Italy's Fiocchi Munizioni, which

already has operations in the United States.