American Outdoor Brands Corp. AOBC, +2.87% announced Wednesday afternoon that it would split into two companies to separate its gun-manufacturing business and the rest of its products. AOBC plans to spin off its outdoor-products and -accessories business in a tax-free dividend to stockholders, and allow that business to retain the American Outdoor Brands Inc. name. The gun business will be renamed Smith & Wesson Brands Inc., the name associated with its firearms. “There have been significant changes in the political climate as well as the economic, investing, and insurance markets since we embarked upon what we believe have been our very successful diversification efforts,” Chairman Barry Monheit said in the announcement. “We believe that separating into two independent public companies will allow each company to better align its strategic objectives with its capital allocation priorities.” Chief Executive James Debney will remain at the helm of American Outdoor, while Mark Smith will become CEO of Smith & Wesson. Chief Financial Officer Jeffrey Buchanan will lead the coordination and execution of the separation, expected to be completed in the second half of 2020, and then retire. Deana McPherson will take over as CFO of Smith & Wesson, and H. Andrew Fulmer will be CFO of American Outdoor. The company will hold a conference call to discuss the plans Thursday morning at 8:30 a.m. Eastern time. AOBC also reaffirmed its financial guidance for the fiscal second quarter, which ended Oct. 31, and plans to announce results on Dec. 5. AOBC shares were halted just after markets closed, and gained more than 2% in extended trading after being released from the hold at 4:50 p.m. Eastern time.