Assault rifles and pistols from the Czech Republic are flooding the world. Colt is aiming for the number one market

You can also listen to the interview in the audio version.

The Czech arms industry was already a concept during the first republic. Now it is experiencing a boom again, and not only because of the war in Ukraine. And Czech armorers Michal Strnad and René Holeček are briskly buying up foreign competition.

“Arms power is perhaps a big word. But the arms industry is undoubtedly one of the few branches of the Czech economy where the Czech Republic keeps the final product, it is not just a subcontractor as is often the case in the automotive industry,” Jan Drahota, CEO and Chairman of the Board of Colt CZ Group, names one of the reasons for the Czech success in an interview with SZ Byznys .

American, Canadian and some European armies have quite a few products of Czech origin in their arsenal. “Firearms, small caliber ammunition directed by Sellier & Bellot. And we don’t even have to be ashamed of what our colleagues from STV, or the Czechoslovak Group, demonstrate in large-caliber ammunition and radio systems,” Drahota calculates the flagship products of Czech armories and ammunition.

Others will probably join them in the foreseeable future. Colt CZ’s cooperation with the Vlach ammunition manufacturer Sellier & Bellot, which is to become part of billionaire René Holeček’s group by the middle of the year, may result in a new type of ammunition. It should fly further and aim more accurately.

Look at: The list The report compiled a ranking of the 100 most valuable Czech companies. By clicking on a row in the table or on the interactive graphic, it is possible to find out more details about the located company.

“Our part of the world is thinking about how to give our soldiers an advantage. And how to invent new calibers so that they have a greater hit at a greater distance. Colt in America works with the American government, in Canada we are partners of the Canadian government, but all NATO countries will think about it. I don’t want to predict what the new standard will be, if it will be a new caliber of the 6.8 mm type, or if it will be a stronger 5.56 mm,” says Jan Drahota in the Agenda program.

The purchase of Vlašim ammunition, which Uherskohradišťská zbrojovka is buying from the Brazilian company CBC Global Ammunition Group for roughly 20 billion crowns, is close to approval. According to Drahota, it will be a big milestone.

“This is undoubtedly a transformational acquisition, just like when we bought Colt in 2021. It gives us a strong foothold in small caliber ammunition, which is what we wanted. And undoubtedly the size is also interesting, Sellier & Bellot is plus or minus half the size of our group. That size will be around a billion euros when the two groups are added together. In terms of performance at the EBITDA level, we will be interestingly large, over five billion crowns,” he said.

The group’s net profit after taxation was approximately 2.04 billion crowns last year. Revenues were the second best in history, 14.86 billion crowns, even though year-on-year growth was only 1.8 percent.

If the antimonopoly office and other foreign authorities approve the merger, Sellier & Bellot will be back in Czech hands around the middle of the year. And Colt CZ will probably become number two in the world in terms of sales, behind the iconic Italian Beretta. Within a few years, he wants to be the world leader in the field of small arms.

“That’s our vision. We want to be the recognized, undisputed leader in our industry. It is not only measured by financial performance. We want to be the ‘manufacturer of choice’, that means the reference manufacturer,” the boss plans.

According to Drahota, there is nothing that would threaten the merger. “For us, we think the transaction is absolutely fine from the point of view of the approval authorities, but I don’t want to prejudge the decision.”

The payment for the acquisition will also include new shares, which will be offered for subscription through the Prague Stock Exchange to the current owner of CBC, who will retain 27-28% of the company. “Any negotiations that are about money are rough. The negotiation was surprisingly fast. It’s a win-win,” comments Drahota on price negotiations.

Colt CZ does not want to change the management of the Vlasim production plant, which employs 1,600 people. According to Drahota, the head of Sellier & Bellot, Radek Musil, is expected to join the group’s board of directors. “We are not thinking that we want to start managing it completely differently. That company has grown incredibly in 20 years,” says Drahota.

Czech armaments companies have been buying in bulk in recent years. Michal Strnad’s rival Czechoslovak Group acquired Fiocchi Munizioni ammunition and hunting arms manufacturer Armi Perazzi. In the spring, it should “swallow” the Sporting Products division of the American group Vista Outdoor.

The Swiss SwissAA Holding joined the Colt CZ Group again this year. Colt CZ opened the way not only to the production of small-caliber ammunition, but also to orders for the armament of other European armies. “It is a key supplier of the Swiss army, it is a supplier of the German army and other armies in NATO,” says Drahota, adding that Colt CZ is currently seeking other military contracts in the countries of the North Atlantic Alliance. “Our salespeople are always on the go,” he adds.

Jan Drahota confirmed without further details that he is also negotiating new acquisitions. According to him, for example, weapon optics would be suitable for the portfolio. The original product of the armory – a handgun – can become part of a new weapon system.

“It almost doesn’t matter if the optics will be attached to the helmet or to the weapon. And of course we want some smarter way of shooting. The grenade launcher we bought last year already has it. You program where you want the grenade to go, and it will fly there,” explains the group’s boss and chairman of the board.

We will publish the second part of the interview with Jan Drahota about the financing of the group and its results for last year in the coming days.

Agenda