Gemtech sues Smith & Wesson for violating acquisition agreement

By Christen Smith

Gemtech sued Smith & Wesson in Idaho federal court for violating an asset purchase agreement signed last year. (Photo: Chris Eger/Guns.com)
Gemini Technologies accused Smith & Wesson of squashing an international sales deal to avoid paying the suppressor manufacturer a cut worth millions, according to a lawsuit filed last week in Idaho federal court.
The gun maker closed a $10 million deal in August to acquire Gemtech, promising a two-part escrow payment and a portion of any product sales proceeds over the next three years, not to exceed $17.1 million.
Gemtech said in court documents filed Jan. 24, however, the gun maker faulted on both ends of the agreement by shorting the escrow payment $1.5 million and scuttling a potential $207 million sales opportunity with buyers in the United Arab Emirates and Bahrain.
“Smith & Wesson’s breaches violated, nullified, and significantly impaired the cash payments and the earn-out payments to Gemtech,” the complaint says.
The suppressor maker, founded in 1993, calls itself an industry leader and a favorite among U.S. military personnel, including Special Operations Forces. The company itself came back from the brink of bankruptcy in 2014 after Ron Martinez, a former Bank of America senior executive, bought a majority of its shares and pledged his home to infuse the company with

Source: Guns.com