SPRINGFIELD, Mass. -- Smith & Wesson, the legendary gun maker whose sales plummeted after it pledged to install safety devices, has been sold by its British owner for just $15 million to Saf-T-Hammer Corp., a tiny start-up in Arizona that makes trigger locks.
Saf-T-Hammer of Scottsdale, Ariz., announced the agreement Monday with Tomkins PLC, which has owned Springfield-based Smith & Wesson since 1987.
Under the agreement, Saf-T-Hammer assumes liability for the numerous lawsuits filed against Smith & Wesson over gun deaths.
"That is reflected in the price," said Michael Blogg, an analyst at the London brokerage Charterhouse Securities. Tomkins paid $112.5 million for privately held Smith & Wesson 14 years ago.
Mitchell Saltz, Saf-T-Hammer founder and chief executive, said the entire $15 million purchase is being funded by a private investor he refused to identify. The investor will be identified when the company files paperwork with the Security and Exchange Commission in the next two weeks.
Smith & Wesson is the nation's oldest and once its largest handgun maker. It is the maker of the .44-caliber Magnum carried by Dirty Harry in the movies, and also manufactured standard sidearms for U.S. soldiers.
Saf-T-Hammer was founded in 1991 and has just five employees, Saltz said, including President Robert Scott, a former vice president for sales and business development for Smith & Wesson.
The trigger locks, cables and lock boxes that Saf-T-Hammer makes will be incorporated into Smith & Wesson's product line, Saltz said.
"We were a small gun safety start-up that was spending everything on research and development," Saltz said. "Now we've got the product developed, and we're ready to market it."
Saltz said Smith & Wesson's headquarters will remain in Springfield, and maybe 30 to 35 jobs will be eliminated. The company employs about 600 people in Springfield and 60 at a factory in Houlton, Maine, down from a peak of about 2,000 in the mid-1970s.
Last year, in an attempt to extricate itself from liability suits brought by 32 cities and other governments, Smith & Wesson signed an agreement with the Clinton administration to install safety locks on all its guns and adopt other safety features and marketing changes.
Gun rights supporters accused Smith & Wesson of selling out. Some vowed to boycott the company. Smith & Wesson's sales were cut roughly in half, according to Ken Jorgensen, a spokesman for the gunmaker.
In October, the company laid off about 125 workers.
The future of the agreement with the government remains unclear.
"We need to sit down with the lawyers from both sides," Saltz said.
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