Sig Sauer, maker of Orlando gunman's rifle, is expanding rapidly in US

Sig Sauer Inc, maker of the semi-automatic rifle believed to have been used in the Orlando shooting rampage, has been growing rapidly in the United States, with plans to sell more silencers and ammunition while vying for a contract to supply several hundred thousand handguns to the U.S. military.

Though not as well known as publicly traded U.S. rivals Smith & Wesson Corp and Sturm Ruger & Co , privately held Sig Sauer produces firearms used by federal agents, U.S. Navy SEALs and police departments throughout the United States, and similar models for sale to the consumer mass market.

Based in Newington, New Hampshire, the company last year secured $178 million in bank financing to help support its expansion plans, according to Thomson Reuters data. The company also hired prominent Washington D.C. firm Crossroads Strategies to lobby on exports and sales to the U.S. Defense Department and federal law enforcement agencies, lobbying disclosures show.

Sig Sauer executives, including Chief Executive Ron Cohen, did not return messages seeking comment for this story.

A U.S. law enforcement official said Omar Mateen used a Sig Sauer MCX assault rifle and Glock handgun when he stormed a packed gay nightclub in Orlando, Florida early Sunday morning. He fatally shot 49 people before police killed him. More than 50 others were wounded.

St. Lucie Shooting Center owner Ed Henson said he could not recall what kind of weapons Mateen had bought from his store, but reports that he had purchased a Glock 17 and Sig Sauer MCX "sounded right."

"SHORT, LIGHT AND SILENCED"

Sig Sauer's MCX features a side-folding stock that shortens the length of the rifle, allowing easier concealment, and a barrel that can be fitted with a silencer.

The MCX was "engineered from the ground up to be short, light and silenced," according to a Sig Sauer promotional brochure for the rifle.

U.S. firearms and ammunition sales typically surge after a mass shooting because of fears there will be new laws curbing ownership of handguns and rifles.

While Sig Sauer’s MCX rifle could receive similar treatment, its starting retail price of about $1,900 could dampen demand. By contrast, a Remington Bushmaster .22-caliber semi-automatic rifle costs less than $500.

After the mass shootings in Paris and San Bernardino, Remington saw stronger demand for its lower priced military-style rifles rather than its more expensive weapons, according to its latest quarterly financial report.

Jack Lesher, a manager of Chuck’s Firearms in Atlanta, said his store only sells Sig Sauer handguns and rifles, which typically cost above $1,000.

“Most of our customers in that price range don’t react to hysteria buying,” Lesher said. “Fear and paranoia is not a good way to do business.”

Sig Sauer is the largest member of a firearms conglomerate owned by German entrepreneurs that also includes J.P. Sauer & Sohn and Blaser Gmbh in Germany and Swiss Arms AG in Switzerland. SIG stands for Schweizerische Industrie Gesellschaft, or Swiss Industrial Co.

THE BIG PRIZE

Last month, Sig Sauer and the governor of Arkansas announced the company would move its ammunition factory to that state from Kentucky. The new site provides significant room for expansion, a key factor in the company’s decision to relocate to Jacksonville, Arkansas, officials said in a press release.

Meanwhile, the big prize for gunmakers is the defense contract to replace the Beretta M9 as the standard sidearm for troops in the U.S. Army and U.S. Air Force. About a dozen companies, including Glock, Sig Sauer and Smith & Wesson, are contenders for an award estimated at $350 million.

Smith & Wesson executives, during a conference call with analysts on March 3, said they expected the process to be lengthy, with a final award expected no sooner than 2017.

In a smaller competition several years ago to replace handguns used by the U.S. Bureau of Alcohol Tobacco and Firearms, Sig Sauer failed to advance to the final phase of evaluation after the agency said Smith & Wesson and Glock handguns performed better during a live-fire testing.

Sig Sauer lodged a protest, but that was denied in 2010 by the U.S. Government Accountability Office.

In the commercial market place, Sig Sauer has been working to expand its offerings of gun silencers, according to documents filed in a dispute with the ATF in federal court.

(Reporting By Tim McLaughlin; Additonal reporting by John Walcott in Washington and Zachary Fagenson in Port St Lucie, editing by Jason Szep and Ross Colvin)