related businesses to Mossberg Corp. for $35 million.

Mossberg, based in North Haven, Connecticut, also will pay an additional amount to be determined at the close of the deal, said Bermuda-based Challenger.

The businesses being sold are: Savage Arms, Lakefield Arms and Passive Bullet Traps. Challenger, a maker of parts that enable data transmission over telecommunications networks, said the sale signals its exit from the firearms manufacturing industry.

In the agreement, Mossberg also said it would lend $9 million to Challenger to help fund its acquisition of Intelect Inc., a Dallas-based maker of telecommunications network parts.

Bloomberg Business News said that with the sale, Challenger will be exiting the business of firearms manufacturing and marketing with a gain of $2 per share and an increase in shareholders' equity to $3.50.

The company said Challenger's acquisition of Intelect Inc. in Dallas, Texas, provides Challenger with a new platform of proven technology and growth in the burgeoning telecommunications industry internationally.

Intelect Inc. is a 30-year-old privately-held company that designs, manufactures and installs voice and data switching and fibre-optic digital communications systems for air traffic control, air defence and business communications. It had revenues of $15 million in 1994.