Weapons and M&A

Colt CZ, from pistols to the (increasingly rare) ingredient of gunpowder

The group took over control of the Czech Synthesia, one of the few nitrocellulose producers in the NATO area. A deal with which it aims to expand in the heavy artillery ammunition sector

30 August 2025

2' min read

From guns to ammunition, including heavy artillery, via nitrocellulose: an indispensable - and unfortunately increasingly in demand - ingredient for gunpowder. This is the rationale behind the acquisition announced yesterday by Colt CZ Group, the Czech firearms giant (it had taken over the historic US company in 2021).

The group will take over 51 per cent of fellow countryman Synthesia Nitrocellulose, reserving the option to rise to 100 per cent in the future, through a share and cash transaction that values it at $1 billion, about 8.2 times its expected profits in 2025.

Colt CZ itself - which also has operations in North America (US and Canada), Sweden, Hungary and Switzerland - explained that the acquisition is part of its 'strategy to expand the group's activities in medium- and large-calibre ammunition', which is currently in high demand.

"We intend to continue vertical integration in the production of ammunition," said President Jan Drahota, "so as to contribute to the strategic independence and self-sufficiency of the Czech Republic and NATO countries in defence supplies.

Syntesia, a private chemical group owned by Kaprain, is one of the three largest producers - among the few active in Europe and North America - of energetic nitrocellulose: that used in gunpowder, also known as fulmicotton. Its production capacity is 6 thousand tonnes per year, soon to rise to 7 thousand, explains the press release from Colt CZ.

The market for this and other explosives has come under strain due to the sudden sharp increase in demand. For nitrocellulose in particular there is also an indirect problem of dependence on China, the country from which 'more than 70 per cent of the cotton linters' (the shorter fibres that wrap the seed, ed.) used to produce it come, denounced last year Armin Papperger, CEO of the German Rheinmetall.

The transaction transferring control of Syntesia to Colt CZ is expected to be completed by the first quarter of 2026, once the necessary approvals have been obtained, making Kaprain the third shareholder of Colt with 5-10%. The two companies have reserved options to sell the remaining 49% of the capital to Colt CZ as well.