425: Colombier Acquisition Corp II to Take Online Firearms Retailer GrabAGun Public in $150 Million Deal

Colombier Acquisition Corp II is set to merge with Metroplex Trading Company, LLC (GrabAGun), valuing the online firearm retailer at $150 million, with support from Donald Trump Jr. and financier Omeed Malik.

Summary

• Colombier Acquisition Corp II (Colombier) is merging with Metroplex Trading Company, LLC, doing business as GrabAGun, through a business combination agreement dated January 6, 2025.
• The deal values GrabAGun, an online firearms retailer, at $150 million.
• GrabAGun reportedly made over $100 million last year and is already profitable.
• Donald Trump Jr. will become a special advisor to the company and has joined 1789 Capital.
• The merger will enable GrabAGun to list on the public stock exchange.
• The company is expected to file paperwork as soon as Monday to start taking the company public on the New York Stock Exchange.
• The transaction involves filing a Registration Statement on Form S-4 with the SEC, including a proxy statement of Colombier II and a prospectus.
• Shareholders of Colombier II will vote on the proposed business combination with GrabAGun.
• The deal is backed by Omeed Malik's 1789 Capital, which has raised over $150 million from GOP mega-donor Rebekah Mercer.
• The company is expected to file paperwork as soon as Monday to start taking the company public on the New York Stock Exchange.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the company's profitability, revenue, and the backing of notable figures. However, the controversial nature of the industry and potential regulatory risks temper the overall sentiment.

Positives

• GrabAGun is a profitable company with over $100 million in revenue last year.
• The company is targeting a growing market of Millennial and Gen Z gun buyers.
• The deal provides GrabAGun with access to public markets and capital.
• The company has the backing of notable figures like Donald Trump Jr. and Omeed Malik.
• PublicSq. is providing payment processing technology, addressing challenges with traditional credit card companies.

Negatives

• The deal may face backlash due to the controversial nature of the firearms industry.
• Traditional credit card companies are increasingly declining to process transactions for firearm sales, which they classify as high-risk.
• The company is expected to file paperwork as soon as Monday to start taking the company public on the New York Stock Exchange.

Risks

• The business combination agreement could be terminated.
• The business combination could disrupt current plans and operations.
• The company may not be able to obtain or maintain necessary permits, including federal firearm licenses.
• There are risks related to information technology, cybersecurity, product liability, and regulatory lawsuits.
• The company may experience difficulties managing its growth and expanding operations.
• The business combination may not be completed in a timely manner or at all.
• The company is expected to file paperwork as soon as Monday to start taking the company public on the New York Stock Exchange.

Future Outlook

The company is expected to file paperwork as soon as Monday to start taking the company public on the New York Stock Exchange. The combined company anticipates benefits from the business combination and GrabAGun's ability to execute its expansion plans.

Management Comments

• Omeed Malik stated this is his latest contrarian deal to take companies who have been eschewed by traditional financiers public.
• Donald Trump Jr. said their support for GrabAGun couldn't come at a better time, as people are more concerned for their security than ever.
• Trump explains that GrabAGun encapsulates 1789s vision of providing solid, well-oiled businesses that have been blackballed by most financiers with financial resources and backing.
• Malik said they are looking to invest in great businesses that aren't impaired by ESG mandates.
• Trump said the younger demographic will be able to purchase guns the way they want online.

Industry Context

This announcement highlights a trend of companies targeting niche markets and those 'eschewed by traditional financiers' finding alternative routes to go public, particularly through SPAC mergers. The focus on the firearms industry and catering to a younger demographic reflects a specific market strategy.

Comparison to Industry Standards

• It is difficult to compare GrabAGun to industry standards without knowing specific profit margins and growth rates.
• Comparable companies in the online retail space include Chewy (CHWY) and Wayfair (W), but these operate in different sectors.
• The valuation of $150 million should be assessed against industry multiples for e-commerce businesses with similar revenue and growth profiles.

Stakeholder Impact

• Shareholders of Colombier II will have the opportunity to vote on the proposed business combination.
• Employees of GrabAGun may experience changes as a result of the merger.
• Customers of GrabAGun will continue to have access to online firearms sales.
• The company is expected to file paperwork as soon as Monday to start taking the company public on the New York Stock Exchange.

Next Steps

• Filing of the Registration Statement on Form S-4 with the SEC.
• Mailing of the definitive proxy statement to Colombier II shareholders.
• Holding a special meeting of Colombier II shareholders to approve the business combination.
• Completion of the business combination and listing of Pubco's securities on the NYSE.

Key Dates