Smith & Wesson Holding Corp.'s accessories unit, Battenfeld Technologies, Inc., said Monday it would buy knife maker Taylor Brands for $85 million in cash, expanding its knife and tool portfolio.

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Kingsport, Tenn.-based Taylor Brands has been a longtime licensee for Smith & Wesson and M&P branded knives, and is the direct owner of brands such as Schrade, Uncle Henry, Old Timer, and Imperial. Smith & Wesson's Chief Executive James Debney said the acquisition would help the company grow its accessories division "by expanding into adjacent and complementary markets."

The firearms maker said the deal is expected to close within three to six weeks and won't impact its quarter ending July 31.

In its year ended April 30, Smith & Wesson reported accessories division sales of $65.3 million, far smaller than its firearms unit, where sales rose 24% to $657.6 million.

Smith & Wesson, which makes the best-selling handgun in the U.S. and is the market leader in modern sporting rifles, has benefited from concerns the government may seek new gun controls after recent high-profile shootings. In June, the company reported fourth-quarter earnings topped expectations.

Smith & Wesson shares are up 73% from a year ago and gained 1.8% to $28.85 in premarket trading.

Write to Joshua Jamerson at joshua.jamerson@wsj.com