DEFM14A: Colombier Acquisition Corp. II to Merge with GrabAGun.com in $150 Million Deal, Creating Publicly Traded Firearms E-commerce Platform

Colombier Acquisition Corp. II announces an extraordinary general meeting to approve its business combination with Metroplex Trading Company LLC (GrabAGun.com), a multi-brand e-commerce retailer of firearms, ammunition, and accessories, in a transaction valued at $150 million, leading to GrabAGun Digital Holdings Inc. becoming a publicly traded company.

Summary

• Colombier Acquisition Corp. II (SPAC) is proposing a business combination with Metroplex Trading Company LLC (GrabAGun.com), an e-commerce retailer of firearms, ammunition, and accessories, to form GrabAGun Digital Holdings Inc. (Pubco).
• The transaction values GrabAGun at $150 million, consisting of $100 million in newly issued Pubco common stock and $50 million in cash consideration to GrabAGun Members.
• Colombier shareholders will vote on 14 proposals at an Extraordinary General Meeting on July 15, 2025, including approval of the Business Combination Agreement, the merger plan, new corporate charter and bylaws, a 2025 Stock Incentive Plan, NYSE listing, director elections, and insider letter amendments.
• Post-closing, assuming no redemptions, Public Shareholders are expected to own approximately 53.9% of Pubco, the Sponsor approximately 13.5%, GrabAGun Members approximately 31.7%, and the GrabAGun Consultant approximately 0.9%.
• A minimum cash condition of $30 million must be met for the transaction to close, which includes funds remaining in the Trust Account (after redemptions and Colombier transaction expenses) and any transaction financing.
• GrabAGun's net revenues decreased by 3% to $93.1 million for the year ended December 31, 2024, from $96.3 million in 2023.
• For the three months ended March 31, 2025, GrabAGun's net revenues decreased by 12% to $23.3 million, compared to $26.6 million in the same period of 2024.
• GrabAGun's net income was $4.3 million for both the years ended December 31, 2024, and 2023. For the three months ended March 31, 2025, net income was $0.1 million, a significant decrease from $0.8 million in Q1 2024.
• The transaction is anticipated to close during the second half of calendar year 2025.

Sentiment

Score: 4

Explanation: The document presents a strategically positive outlook for the business combination, highlighting growth opportunities and a scalable tech platform in a niche market. However, recent financial performance shows declining revenues and net income, and the extensive list of risks, particularly those related to the company's lack of public company experience, the highly regulated industry, and potential for significant shareholder dilution, temper the overall sentiment. The absence of a third-party fairness opinion also adds a layer of caution.

Positives

• GrabAGun operates in a robust addressable market for firearms, ammunition, and related accessories, estimated at $25 billion in the U.S. for 2024, with the online segment showing expansion.
• The company is positioned as a leading mobile-focused firearms retail platform, with mobile sales accounting for approximately 60% of total customer transactions and 58% of revenues in the 12 months ended October 2024.
• GrabAGun's business is cash flow generative.
• The company experienced year-over-year revenue growth of nearly 10% during the twelve months ended September 30, 2024, compared to the same period in 2023, despite an 8% decline in NICS background checks.
• GrabAGun boasts passionate customers and strong user engagement, evidenced by a mailing list of over 1.25 million and an estimated 32% email open rate for the 12 months ending October 2024, with email-generated average order value exceeding general AOV by approximately $75.
• The company has deep industry relationships and extensive product offerings, providing over 78,000 firearms products from more than 2,000 brands, supported by a nationwide network of 42,000 federal firearms licensed dealers.
• GrabAGun utilizes a scalable tech platform with AI-enabled product listings, proprietary demand prediction, automated procurement systems, and an eGunbook compliance system to enhance efficiency and streamline operations.
• The business combination is expected to offer increased public attention and access to a broader network of potential customers for GrabAGun.
• Multiple avenues for growth are identified, including enhanced marketing, cross-selling, broadening procurement channels, and future acquisition/market consolidation opportunities within the 2A Sector.
• GrabAGun's experienced management team, led by CEO Marc Nemati, plans to continue running the business after the Closing.
• The Colombier Board determined the acquisition at an attractive valuation based on implied valuation of other guideline internet platform companies.
• The terms and conditions of the Merger Agreement were the product of arms-length negotiations between the parties.
• GrabAGun Members are converting their ownership interests into Pubco shares, demonstrating continued commitment, and these shares will be subject to lock-up restrictions.
• The proposed Business Combination with GrabAGun was deemed the most attractive opportunity after a thorough review of other potential acquisition targets.

Negatives

• GrabAGun's business plans, including growth initiatives, may not be achieved, or may take longer or be more costly to implement than anticipated.
• GrabAGun and its current management team have no prior experience managing a public company, which may lead to difficulties in financial reporting, regulatory compliance, and increased operational demands.
• The company operates in a highly competitive industry with larger and better-capitalized competitors, which could reduce market share and harm financial performance.
• Macroeconomic uncertainty could negatively impact GrabAGun's revenues and financial performance.
• Consumer spending habits are subject to change, and negative publicity about GrabAGun, firearms ownership, or associated public figures (like Donald J. Trump Jr.) could deter platform engagement or sales.
• The firearms industry is highly regulated, and changes in laws or regulations, or potential litigation, could result in significant costs, license revocation, or business disruption.
• GrabAGun's IT infrastructure and cybersecurity measures may need enhancement to meet scaling demands and protect user data, which could be costly and may not prevent breaches.
• The Colombier Board did not obtain a third-party fairness opinion, relying solely on internal analysis, which raises concerns about whether GrabAGun was properly valued.
• Significant transaction and transition costs are associated with completing the Business Combination, which will reduce available cash.
• High redemption rates by Public Shareholders could deplete the Trust Account, potentially impacting the $30 million minimum cash condition for closing.
• There is a risk that Pubco's securities may not be approved for listing on the NYSE or that Pubco may not be able to comply with continued listing rules after the Closing.
• The market price of Pubco's common stock may decline significantly post-Business Combination, and an active market may not develop, affecting liquidity.
• The issuance of Pubco Common Stock as consideration for the Business Combination will result in immediate and substantial dilution to non-redeeming Colombier shareholders, with further dilution possible from warrant exercises and future equity issuances.
• The proposed charter and bylaws contain structural defenses (e.g., director removal for cause only, limitations on calling special meetings, unanimous written consent for shareholder action) that could limit shareholder actions and delay or discourage certain transactions.
• The involvement of Donald J. Trump Jr. as a consultant and director nominee, while seen as a positive for brand visibility, also carries the risk of negative publicity impacting the business.
• GrabAGun's net revenues and net income have declined in recent periods (Q1 2025 vs. Q1 2024, and FY2024 vs. FY2023), indicating a potential weakening in financial performance leading up to the merger.

Risks

• The ability of Colombier shareholders to exercise redemption rights with respect to a large number of Public Shares, the terms of the proposed Business Combination or other factors may not allow Colombier to complete the Business Combination or optimize its capital structure.
• Past performance by any member of the Colombier management team or Colombier Board, the Sponsor or any of their respective affiliates, may not be indicative of future performance of an investment in Colombier or Pubco.
• Neither the Colombier Board nor any committee thereof obtained a fairness opinion (or any similar report or appraisal) in determining whether or not to pursue the Business Combination. Consequently, you have no assurance from an independent source that the price Colombier is paying for GrabAGun is fair to Colombier – and, by extension, its securityholders – from a financial point of view.
• Colombier’s non-redeeming shareholders and GrabAGun Members may not realize a benefit from the Business Combination commensurate with the ownership dilution they will experience in connection with the Business Combination.
• There can be no assurance that the shares of Pubco Common Stock that will be issued in connection with the Business Combination will be approved for listing on the NYSE following the Closing, or that Pubco after the Closing will be able to comply with the continued listing rules of the NYSE.
• An active market for Pubco’s securities may not develop, which would adversely affect the liquidity and price of Pubco’s securities.
• Pubco’s stock price may change significantly following the Business Combination and you could lose all or part of your investment as a result.
• Pubco will issue shares of Common Stock as consideration for the Business Combination, which will result in immediate dilution to Colombier shareholders, and may issue additional shares or other equity or equity-linked securities without approval of its shareholders, which would dilute existing ownership interests and may depress the market price of shares of Pubco Common Stock.
• Pubco may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous for warrant holders, thereby making warrants worthless.
• Pubco may amend the terms of the Warrants in a manner that may be adverse to holders of the Pubco Public Warrants with the approval by the holders of at least a majority of the then outstanding Warrants.
• GrabAGun’s business depends on its vendor partner relationships, the availability of their products and the terms of the agreements governing those relationships, and if these are lost, product offerings would be limited and less desirable.
• GrabAGun’s sales are dependent on continued innovations in the firearms and ammunition offerings by its vendor partners, the competitiveness of their offerings and its ability to partner with new and emerging makers.
• GrabAGun sells products that create exposure to potential product liability, warranty liability or personal injury claims and litigation.
• Gun violence prevention and legislative advocacy organizations that oppose sales of firearms and ammunition could inhibit sales of GrabAGun’s products.
• Negative publicity or broader changes in public perceptions about the firearms industry could affect the willingness of financial institutions and other service providers to continue doing business with GrabAGun.
• Substantial competition could reduce GrabAGun’s market share and significantly harm its financial performance.
• If GrabAGun is unable to maintain and expand its network of Federal Firearms License (FFL) holders, its business and financial results could be adversely affected.
• GrabAGun’s growth to date may not be sustainable or indicative of future performance, placing significant demands on management and resources.
• Future strategic acquisitions by GrabAGun could disrupt operations and have an adverse effect on financial results.
• The success of GrabAGun’s business depends on the continuing development, maintenance and operation of its information technology systems.
• Breaches of data security and the failure to protect GrabAGun’s information technology systems from cybersecurity threats could adversely impact its business.
• Issues relating to the use or capabilities of artificial intelligence, including social and ethical issues, in GrabAGun’s eCommerce platform or offerings may result in reputational harm and liability and increased costs.
• Real or perceived errors, failures or bugs in GrabAGun’s website could materially and adversely affect its operating results and growth prospects.
• GrabAGun’s business depends on continued and unimpeded access to its website on the internet, which relies on third-party telecommunications and internet service providers (ISPs).
• Changes in tax rates, changes in tax treatment of companies engaged in e-commerce, or the adoption of new tax legislation may adversely impact GrabAGun’s financial results.
• If GrabAGun loses any of its executive officers or key personnel, is unable to attract and retain talent, or if labor costs significantly increase, its business could be disrupted.
• Negative publicity or media coverage about GrabAGun or persons or businesses associated with GrabAGun (e.g., Donald J. Trump Jr.) could adversely affect its reputation and business.
• A natural disaster or other adverse occurrence at GrabAGun’s warehouse and fulfillment facility or a third-party provider location could damage its business.
• Increases in the cost of commercial delivery services or disruptions of those services could materially adversely impact GrabAGun’s business.
• GrabAGun is exposed to risks from legal proceedings, including intellectual property infringement claims, and audits, including ATF compliance inspections, which may result in substantial costs and expenses or interruption of normal business operations.
• Failure to comply with complex and evolving laws and regulations applicable to GrabAGun’s operations or failure to meet stakeholder expectations on corporate responsibility matters could adversely affect its business.
• Members of GrabAGun’s management team have limited or no prior experience managing a public company, which could lead to challenges in compliance and oversight.
• National and regional economic, social and political conditions, including inflation, interest rate changes, and geopolitical instability, may have an adverse impact on GrabAGun’s business.
• The interruption of the flow of firearms and ammunition from suppliers could disrupt GrabAGun’s supply chain.
• Failures in GrabAGun’s FFL validation or shipment processes could lead to regulatory violations, customer dissatisfaction, and material harm to its business.

Future Outlook

Pubco intends to continue GrabAGun's business as a multi-brand e-commerce retailer of firearms, ammunition, and related accessories. The company aims to accelerate growth and consolidate the firearms industry by leveraging its technology-first approach and potentially acquiring related businesses. Future plans include expanding digital marketing efforts through social media, online advertising, and third-party endorsements to increase brand visibility and customer engagement. While operating expenses are expected to increase in absolute dollar amounts due to growth and public company costs, they are projected to decline as a percentage of net revenues over time. Management believes that the estimated net proceeds from the merger, combined with existing cash, will be sufficient to fund operations for at least the next twelve months.

Management Comments

• The Colombier Board has unanimously approved the Merger Agreement and the Transactions, determining them to be fair, advisable, and in the best interests of Colombier, and recommends a 'FOR' vote on all proposals.
• Colombier management and Board members, with extensive experience in e-commerce and consumer-oriented businesses, concluded their background enabled necessary analyses and determinations regarding the Business Combination.
• The Colombier Board believes that pursuing a business combination with GrabAGun is an attractive opportunity due to the robust addressable market, GrabAGun's competitive e-commerce model, cash flow generative business, passionate customer base, deep industry relationships, scalable tech platform, and attractive valuation.
• Company management believes the addressable market for GrabAGun’s product offerings, based on U.S. 2024 retail data, may have totaled as much as $25 billion.
• GrabAGun estimates that during the 12 months ended in October 2024, its average e-mail order value (AOV) exceeded its general AOV by approximately $75 per order.
• GrabAGun's experienced management team, led by Chief Executive Officer Marc Nemati, plans to continue running the business after the Closing.
• The Colombier Board determined that the overall benefits expected from the Business Combination outweigh any potential risks created by conflicts of interest.
• GrabAGun's goal is for customers to view it as an extension of their Second Amendment (2A) right and a trusted source for firearms.
• GrabAGun believes its tech-first approach and mobile-optimized platform are well-positioned to capture the growing market of younger, technology-savvy customers.
• GrabAGun intends to focus on accelerating growth and consolidating the 2A Sector by applying its tech-forward approach to fragmented industry supply chains.

Industry Context

GrabAGun operates within the highly fragmented U.S. firearms and ammunition retail market, which was estimated at $25 billion in 2024. The industry is characterized by rapid innovation and frequent new product introductions. GrabAGun positions itself as a tech-forward, mobile-first e-commerce alternative to traditional brick-and-mortar stores, aiming to capture the growing segment of younger, tech-savvy consumers. The sector faces stringent advertising restrictions, making digital engagement and third-party endorsements crucial. The industry is also significantly impacted by gun violence prevention and legislative advocacy organizations, which can influence public perception and the willingness of financial institutions and service providers to engage with firearms businesses.

Comparison to Industry Standards

• GrabAGun's 1-year backward-looking revenue growth rate of 9.2% (for the 12 months ended September 30, 2024, compared to the same period in 2023) falls between the median (7.9%) and the upper quartile (16.8%) of the selected Guideline Companies (Mercado Libre, DoorDash, Carvana, Uber, Booking Holdings, Costco, Chewy, eBay, Etsy, Ammo, Inc.).
• GrabAGun's estimated EV/LTM EBITDA multiple of 37.1x (based on an estimated $196.5 million enterprise value and $5 million EBITDA for the 12 months ended September 30, 2024) is positioned between the upper quartile (47.6x) and median (34.0x) of the Guideline Companies.
• Notably, GrabAGun's estimated growth rate significantly outpaced Ammo, Inc.'s (a direct industry comparable) negative 2.3% 1-year forward growth rate.
• The document acknowledges that the Guideline Companies are generally larger, better capitalized, and operate in more diverse business lines than GrabAGun, making direct comparisons challenging, but were selected for their similar e-commerce and tech-enabled service models.

Management Changes

Corporate Governance

Legal Proceedings

• To the knowledge of Colombier's management, there is no litigation currently pending or contemplated against Colombier, its officers or directors in their capacity as such, or against any of its property.
• GrabAGun is not currently a party to any legal proceedings, but may become subject to commercial, regulatory, employment, tort, and other litigation in the ordinary course of business.
• GrabAGun is exposed to potential product liability, warranty liability, or personal injury claims and litigation related to the products it sells.
• GrabAGun is subject to audits by the ATF in the form of compliance inspections, with possible consequences for noncompliance ranging from a warning letter to license revocation.
• GrabAGun may incur losses due to lawsuits, including potential class action suits, relating to its policies on the sale of firearms and ammunition, background checks, and compliance with sales laws and regulations.

Related Party Transactions

• Colombier Sponsor II LLC (Sponsor) paid $25,000 for 4,250,000 Founder Shares and purchased 5,000,000 Private Warrants for $5,000,000.
• The Sponsor has agreed to vote its shares in favor of the Business Combination and waive redemption rights for Founder Shares, creating a financial incentive to complete the merger.
• Farvahar Capital LLC, an affiliate of the Sponsor, receives $10,000 per month from Colombier for office space and administrative services ($180,000 paid as of March 31, 2025).
• OJJA LLC, an affiliate of the Sponsor, receives $60,000 per month from Colombier for the services of its Chief Executive Officer, Chief Financial Officer, Chief Investment Officer, and Chief Operating Officer ($1,040,000 paid as of March 31, 2025).
• GrabAGun Members (Marc Nemati, Matthew Vittitow, Justin C. Hilty, Brent Cossey) will receive $100 million in Pubco stock and $50 million in cash consideration, and will be subject to lock-up and non-competition/non-solicitation agreements.
• Donald J. Trump Jr., a strategic consultant to GrabAGun, received restricted member interest units that will settle into 300,000 newly issued Pubco common stock shares upon closing; he is also a partner at 1789 Capital (affiliated with Sponsor) and a director nominee for Pubco.
• Credova Financial, LLC, a wholly-owned subsidiary of PublicSq. (a company with ties to Colombier I management), provides consumer financing to GrabAGun customers, representing approximately 4% of total sales transactions and 8% of total revenues in 2024 and 2023.
• Stephens Inc., financial advisor to GrabAGun, will receive a transaction fee of $2,500,000 upon Closing.
• BTIG, LLC, IPO Underwriter for Colombier and Capital Market Advisor, may receive deferred underwriting fees up to $5,950,000 and a capital market advisory fee of $1,500,000, plus reimbursable expenses.
• Roth Capital Partners, LLC, financial advisor to Colombier, may receive a deferred fee up to $1,190,000 and a capital market advisory fee of $1,000,000, plus reimbursable expenses.

Stakeholder Impact

• **Shareholders (Public)**: Will have the option to redeem their shares for cash (approximately $10.54 per share as of March 17, 2025) or become shareholders of Pubco. They face risks of significant dilution, a potentially less liquid trading market for Pubco shares, and negative returns if the stock price declines post-merger.
• **Shareholders (Sponsor)**: Have a strong financial incentive to complete the merger, as their initial investment of $5,025,000 would be worthless if the SPAC liquidates without a business combination. They are expected to hold 13.5% of Pubco post-closing (assuming no redemptions) and may realize a substantial profit even if the Pubco share price falls below the IPO price.
• **GrabAGun Members**: Will receive substantial consideration ($100 million in stock and $50 million in cash) and are expected to continue leading the business, subject to lock-up and non-competition agreements.
• **Employees**: GrabAGun's executive management team will continue in their roles at Pubco with new employment agreements offering increased base salaries and bonus opportunities. A new 2025 Stock Incentive Plan will provide equity awards to employees, officers, and directors.
• **Customers**: Will continue to access GrabAGun's e-commerce platform, potentially benefiting from enhanced product offerings, improved customer experience, and broader reach due to increased public attention.
• **Advisors and Underwriters**: Key financial advisors and underwriters involved in the transaction stand to receive significant fees contingent upon the successful closing of the business combination.

Next Steps

• Colombier Extraordinary General Meeting to be held on July 15, 2025, to vote on the Business Combination and related proposals.
• If approved, the Closing of the Business Combination is expected to occur no later than the second business day following the satisfaction or waiver of closing conditions.
• Pubco will apply for listing its Common Stock and Warrants on the NYSE under proposed symbols PEW and PEWW, respectively, effective at Closing.
• Pubco and GrabAGun will provide written notice to the ATF of a change of control within 30 days after the Closing Date.
• Pubco and GrabAGun will designate a qualified individual as a Responsible Person as defined by the ATF as promptly as practicable after the Closing Date.
• GrabAGun plans to accelerate digital marketing efforts, including social media, online advertising, and third-party endorsements.
• GrabAGun intends to pursue strategic acquisitions of e-commerce retailers, distributors, and importers in the 2A Sector.
• Pubco will adopt the 2025 Stock Incentive Plan, if approved by shareholders, to grant equity-based awards.
• Pubco will adopt a written related person transaction policy, Corporate Governance Guidelines, and a Code of Business Conduct and Ethics.

Key Dates

Recommendation

Keywords

E-commerce, Firearms, Ammunition, Retail, Business Combination, SPAC, GrabAGun, Colombier Acquisition Corp. II, Public Company, Second Amendment, Online Retail, Gun Control, Regulation, Texas, Digital Marketplace, AI Technology, Supply Chain