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Exclusive: ATK close to deal with gun accessory maker Bushnell - sources

By Olivia Oran and Greg Roumeliotis

(Reuters) - Alliant Techsystems Inc , the world's largest ammunition maker, is in advanced talks to buy Bushnell Outdoor Products Inc in a deal that could value the gun accessory maker at around $1 billion, two sources familiar with the matter said on Monday.

A deal for Bushnell, owned by buyout firm MidOcean Partners, comes amid pressure on private equity firms to review investments in gun-related companies following the fatal shootings last December of 26 people at a school in Newtown, Connecticut.

The people said, however, that MidOcean's desire to sell Bushnell was not influenced by those considerations. Private equity firms buy companies to sell them later at a profit and MidOcean has owned Bushnell since 2007.

The people asked not to be identified because the matter is confidential. They cautioned that a deal has not yet been finalized and negotiations could still fall apart.

MidOcean Partners and Bushnell declined to comment, while ATK did not respond to a request for comment.

Bushnell hired Morgan Stanley and Robert W. Baird to shop the company, other people familiar with the matter told Reuters in February.

Founded in 1948, Overland Park, Kansas-based Bushnell makes accessories such as binoculars, telescopes, night vision equipment and GPS devices for sports like hunting and fishing. Its brands include Butler Creek, Final Approach, Hoppe's, Millett, Night Optics, Primos, Simmons, Stoney Point, Tasco and Uncle Mike's.

Freedom Group, whose AR-15-type Bushmaster rifle was used in the Newtown shootings, was put up for sale by its private equity backer Cerberus Capital Management LP just days after the shootings following investor pressure.

Bushnell was acquired by MidOcean in 2007 from another private equity firm, Wind Point Partners. Last April, Bushnell acquired Primos Hunting, a hunting products maker.

ATK, an aerospace and defense company with a market value of $3.1 billion, produces military small-caliber ammunition for use in soldier-carried weapons as well as ammunition for the sport enthusiast and law enforcement markets.

Teachers' Retirement System of the City of New York and New York City Employees' Retirement System are among the public pension funds that sold shares in ATK earlier this year following the Newtown massacre.

ATK shares however are up 57 percent year-to-date, outperforming a 20 percent rise in the S&P 500 index <.INX>. Failure by U.S. Congress to pass gun-control legislation after the Newtown shootings has buoyed investor appetite for gun-related companies.

(Reporting by Olivia Oran and Greg Roumeliotis in New York; Editing by Leslie Adler and Eric Walsh)

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