An investment firm that owns several major firearms manufacturers, including the company that produces the assault rifle used in last week's shooting at Sandy Hook Elementary School, announced this morning that it intends to put its entire firearms portfolio up for sale.
"It is apparent that the Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level," Cerberus Capital Management said in its statement. "It is not our role to take positions, or attempt to shape or influence the gun control policy debate... There are, however, actions that we as a firm can take. Accordingly, we have determined to immediately engage in a formal process to sell our investment in Freedom Group."
Cerberus became a key member of the gun industry in 2006 when it purchased Bushmaster Firearms from its then-owner Richard Dyke in 2006. It subsequently founded the firearms manufacturer holding company Freedom Group and acquired several other notable gun brands, including Remington Arms and Marlin.
In just two short years following the purchase of Bushmaster, Cerberus had become the nation's largest firearms and ammunition distributor, selling over half of all semiautomatic rifles.
According to Fortune's Dan Primack, Cerberus' sale of Freedom Group is "not a financial decision," as the holding company's value is "artificially low," and a buyer will be hard to find.
However, it is worth noting that the California State Teachers' Retirement System, one of Cerberus' largest investors, said yesterday that it would review its indirect investment in Freedom Group in light of the Newtown tragedy.
Also yesterday, Walmart unexpectedly ceased online sales of the Bushmaster assault rifle used by shooter Adam Lanza, though its unclear how long the moratorium will last.
Dick's Sporting Goods, another major retailer of sporting rifles, said in a statement this morning that it would be suspending the sale of semiautomatic rifles in all stores nationwide for an indefinite period of time.