Reiterates Intention to Vote AGAINST the CSG
Proposal
Recently Released Financial Results from
Vista Make It Clear That Selling the Entire Company Provides
Shareholders a Better Return Than Divesting The Kinetic
Group
NEW YORK, July 26, 2024 /PRNewswire/ -- Gates Capital
Management, Inc. ("Gates Capital Management" or "we"), an
event-driven alternative asset manager that beneficially owns
5,589,041 shares of common stock, or approximately 9.6%, of Vista
Outdoor, Inc. ("Vista" or the "Company") (NYSE: VSTO), today
stated its belief that the $42
all-cash offer for Vista from MNC Capital Partners, L.P. ("MNC") is
superior to the proposed sale of The Kinetic Group to Czechoslovak
Group a.s. ("CSG") and reiterated its opposition to the CSG
proposal.
On Monday, July 22, 2024 Vista
disclosed CSG's revised offer for The Kinetic Group in a press
release (the "July 22 Press Release")
as well as preliminary Q1 2025 financial results. On the same
day, MNC reaffirmed its commitment to its fully financed
$42 per share all-cash offer for
Vista. After carefully reviewing the revised offer and the
updated financial results, we strongly believe that the proposed
transaction from CSG is not in the best interest of shareholders
and that the Company should immediately begin negotiating a merger
agreement with MNC.
If shareholders assume CSG and MNC are each paying the same
$2.15 billion for The Kinetic Group,
then MNC is also paying approximately $900
million additional cash for Revelyst, which generated
approximately $40 million of EBITDA
the last twelve months ("LTM") ended June
2024 (after subtracting $50
million of corporate costs). Considering those
results, the MNC proposal would pay shareholders approximately 22x
LTM EBITDA for Revelyst, which we believe is attractive given the
increasing risk of Vista failing to achieve its operating goals for
Revelyst. In the July 22 Press
Release Vista repeated its expectation of doubling Revelyst's
EBITDA in FY25, but also reported that sales declined more than
13%, EBITDA margin declined nearly 200 basis points, and segment
operating income was negative during the quarter ended June
2024. We believe these current trends have made a spin-off,
or owning Revelyst as a standalone, sub-scale public company, less
attractive than selling the entire Company.
We would also note that on July 24,
2024, leading independent proxy advisory firm Institutional
Shareholder Services ("ISS") recommended that shareholders vote
AGAINST the latest CSG merger proposal.
Furthermore, we believe Vista should set a more current record
date in light of delaying the vote on the CSG proposal several
times. Vista is maintaining a stale record date of
April 1, 2024, which is 120 days
before the currently scheduled vote on July
30, 2024. We believe there has been significant
turnover in the shareholder base since April
1, 2024, and shareholders eligible to vote do not accurately
represent the Company's current investor base. We are
concerned that the stale record date is a sign of an entrenched
management team and board of directors that is not acting in the
best interest of current shareholders. The confounding
actions by the Vista Board have also resulted in a recently filed
lawsuit, which we believe accurately alleges in part:
"the Board and management are instead selling the Company's crown
jewel to protect their professional reputations and rectify the
Company's recent history of disappointing capital allocation and
over-leveraging so as to maintain their leadership positions in the
post-close Revelyst."
Finally we encourage all Vista shareholders who believe the
$42 all-cash offer from MNC is
superior to the CSG proposal to let the Board of Directors know
their opinion publicly, or by contacting the Vista Board directly
at BoardOfDirectors@VistaOutdoor.com
About Gates Capital Management
Gates Capital Management is an event-driven alternative asset
manager for institutional and private clients globally. Gates
Capital was founded in 1996 and today has more than $2 billion in assets under management.
Further information is available at www.gatescap.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release does not constitute an offer to sell or
solicitation of an offer to buy any of the securities described
herein in any state to any person. The information herein contains
"forward-looking statements". Specific forward-looking statements
can be identified by the fact that they do not relate strictly to
historical or current facts and include, without limitation, words
such as "may," "will," "expects," "believes," "anticipates,"
"plans," "estimates," "projects," "potential," "targets,"
"forecasts," "seeks," "could," "should" or the negative of such
terms or other variations on such terms or comparable terminology.
Similarly, statements that describe our objectives, plans or goals
are forward-looking. Forward-looking statements are subject to
various risks and uncertainties and assumptions. There can be no
assurance that any idea or assumption herein is, or will be proven,
correct or that any of the objectives, plans or goals stated herein
will ultimately be undertaken or achieved. If one or more of such
risks or uncertainties materialize, or if Gates Capital
Management, Inc's ("Gates") underlying assumptions prove to be
incorrect, the actual results may vary materially from outcomes
indicated by these statements. Accordingly, forward-looking
statements should not be regarded as a representation by Gates that
the future plans, estimates or expectations contemplated will ever
be achieved.
Media Contacts:
ASC
Advisors
Taylor
Ingraham / Morgan Davis
tingraham@ascadvisors.com / mdavis@ascadvisors.com
203-992-1230
Investor Contact:
Paul Lucas
Managing Director
plucas@gatescap.com
212-626-0290
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