CSG Transaction Represents Valuation ~$250
Million Higher Than Implied Valuation of MNC’s Last Proposal for
The Kinetic Group
Private Equity Firm Partnered with MNC
Approached Vista Outdoor Without the Participation of MNC; Vista
Outdoor Board in Active Discussions with Private Equity Firm
Regarding Sale of Revelyst
CSG Transaction Delivers Increased Cash
Consideration, Plus Opportunity to Participate in Upside Potential
of Revelyst and Potential Change of Control Premium
Vista Outdoor Urges Stockholders to Vote FOR
CSG Transaction at September 27th Special Meeting to be Able to
Close Ahead of October 15th Termination Date
Vista Outdoor Inc. (“Vista Outdoor”, the “Company”) (NYSE: VSTO)
today announced that its Board of Directors unanimously recommends
stockholders vote for the transaction with Czechoslovak Group a.s.
(“CSG”) to acquire The Kinetic Group and invest in Revelyst (the
“CSG Transaction”), and unanimously rejects the last proposal from
MNC Capital (“MNC”).
Board Determination Follows Robust Process
that Yielded Compelling Stockholder Value
The Board has been steadfast in its commitment to maximize value
for Vista Outdoor stockholders and has consistently taken actions
to achieve this goal. After the Company announced its intention to
separate Revelyst and The Kinetic Group in May 2022, the Board
undertook a thorough process to unlock stockholder value, engaging
with 26 counterparties that were each given fair and full
consideration. Over the past six weeks as part of its subsequent
review of strategic alternatives, Vista Outdoor engaged in
discussions with multiple interested parties, including extensively
negotiating with both MNC and CSG to deliver superior value to
stockholders.
Ultimately, CSG agreed to acquire The Kinetic Group for $2.15
billion, which is ~$250 million higher than the implied valuation
of MNC’s last proposal, and agreed to purchase shares representing
7.5% of standalone Revelyst for $150 million, valuing Revelyst at
$2.0 billion. At the closing of the CSG Transaction, Vista Outdoor
stockholders will receive $28 in cash per share and one share of
Revelyst common stock for each share of Vista Outdoor common
stock.
Board In Active Discussions with the Private
Equity Firm Partnered with MNC (the “Private Equity Firm”) to
Separately Acquire Revelyst
On September 15, the Private Equity Firm partnered with MNC
reached out to Vista Outdoor. The Company has subsequently been in
active dialogue with the Private Equity Firm regarding a potential
acquisition of Revelyst, separate from MNC. While no agreement has
been reached, the Board will continue its discussions with the
Private Equity Firm. An agreement could be reached in conjunction
with or independent of the CSG Transaction.
The Board is confident that the CSG Transaction, which
crystallizes value for the Kinetic Group that is ~$250 million
higher than the value implied in MNC’s last proposal and enables
stockholders to retain the ability to realize a potential change of
control premium for Revelyst (including if an agreement is reached
with the Private Equity Firm), is the optimal path to deliver the
highest value to Vista Outdoor stockholders.
CSG Transaction Delivers Significant Cash
Consideration and Upside Potential in Revelyst
The CSG Transaction, which can be terminated after October 15,
delivers significant and immediate cash consideration to
stockholders. At the closing of the CSG Transaction, Vista Outdoor
stockholders will receive $28 in cash per share and one share of
Revelyst common stock for each share of Vista Outdoor common stock,
providing stockholders the opportunity to participate in the upside
potential of Revelyst. Following the closing of the CSG
Transaction, Revelyst also plans to establish an initial $50
million share repurchase program.
Vista Outdoor and CSG have received all regulatory approvals
required under the merger agreement and are prepared to close the
CSG Transaction in October, subject to receipt of stockholder
approval and satisfaction of other customary closing
conditions.
Board Unanimously Rejects MNC’s Proposal
That Undervalues Vista Outdoor
Over the past six weeks, Vista Outdoor has provided MNC with
access to almost 900 documents, complied with ~270 data requests
and held 12 diligence meetings. Throughout Vista Outdoor’s entire
engagement with MNC, MNC has been provided access to ~5,800
documents, received responses to ~1,300 data requests and
participated in over 50 diligence meetings.
After this extensive engagement with MNC, Vista Outdoor received
a revised proposal from MNC to acquire the Company for $43 in cash
per share. Following consultation with its financial and legal
advisors, the Board has unanimously rejected this last MNC proposal
and determined that it would not be more favorable to Vista Outdoor
stockholders from a financial point of view than the CSG
Transaction.
MNC’s proposal undervalues the Company and deprives the
Company’s stockholders of the value opportunity Revelyst presents
as a standalone company.
MNC’s proposal implies an enterprise value of ~$1.9 billion for
The Kinetic Group and ~$1.2 billion for Revelyst.1 In comparison,
the CSG Transaction represents an enterprise value of $2.15 billion
for The Kinetic Group and an investment in Revelyst at a value of
$2.0 billion.
Vista Outdoor urged MNC to provide its best and final
proposal by Tuesday, September 17, but MNC failed to provide an
improved offer.
Strong Momentum Underway at Revelyst
Revelyst’s GEAR Up transformation program is on track to deliver
value in line with prior guidance. Revelyst expects to double
Adjusted EBITDA sequentially for the quarter and for the full year,
with a clear path to $100 million in run-rate cost savings by
fiscal year 2027 and mid-teens EBITDA margin long-term. Revelyst is
also gaining market share in its key categories through new product
and partnership launches.
Urges Stockholders to Vote FOR the CSG
Transaction to Secure Significant Value Now
After October 15, the merger agreement with CSG can be
terminated. Therefore, Vista Outdoor urges stockholders to vote for
the CSG Transaction at the fast-approaching special meeting of
stockholders on September 27 to lock in the value of the CSG
Transaction that:
- Delivers significant cash consideration of $28
per share;
- Represents ~$250 million more in value for The
Kinetic Group than MNC’s last proposal;
- Results in a transaction closing in October,
given all required regulatory approvals have been received;
and
- Provides the opportunity for Vista Outdoor
stockholders to participate in the upside potential of Revelyst and
a potential change of control premium.
The Board of Directors unanimously recommends Vista Outdoor
stockholders vote “FOR” the CSG Transaction at the upcoming special
meeting of stockholders, which will be held at 9:00 am (Central
Time) on September 27, 2024.
The Company today also filed a related investor presentation
with the U.S. Securities and Exchange Commission (the “SEC”).
Additional information can be found in Vista Outdoor’s proxy
statement/prospectus and the supplements thereto filed with the
SEC, including the most recent supplement to the proxy
statement/prospectus filed today.
Morgan Stanley & Co. LLC is acting as sole financial adviser
to Vista Outdoor and Cravath, Swaine & Moore LLP is acting as
legal adviser to Vista Outdoor. Moelis & Company LLC is acting
as sole financial adviser to the independent directors of Vista
Outdoor and Gibson, Dunn & Crutcher LLP is acting as legal
adviser to the independent directors of Vista Outdoor.
About Vista Outdoor Inc.
Vista Outdoor (NYSE: VSTO) is the parent company of more than
three dozen renowned brands that design, manufacture and market
sporting and outdoor products. Brands include Bushnell, CamelBak,
Bushnell Golf, Foresight Sports, Fox Racing, Bell Helmets, Camp
Chef, Giro, Simms Fishing, QuietKat, Stone Glacier, Federal
Ammunition, Remington Ammunition and more. Our reporting segments,
Outdoor Products and Sporting Products, provide consumers with a
wide range of performance-driven, high-quality and innovative
outdoor and sporting products. For news and information, visit our
website at www.vistaoutdoor.com.
Forward-Looking Statements
Some of the statements made and information contained in this
press release, excluding historical information, are
“forward-looking statements,” including those that discuss, among
other things: Vista Outdoor Inc.’s (“Vista Outdoor”, “we”, “us” or
“our”) plans, objectives, expectations, intentions, strategies,
goals, outlook or other non-historical matters; projections with
respect to future revenues, income, earnings per share or other
financial measures for Vista Outdoor; and the assumptions that
underlie these matters. The words “believe,” “expect,”
“anticipate,” “intend,” “aim,” “should” and similar expressions are
intended to identify such forward-looking statements. To the extent
that any such information is forward-looking, it is intended to fit
within the safe harbor for forward-looking information provided by
the Private Securities Litigation Reform Act of 1995.
Numerous risks, uncertainties and other factors could cause our
actual results to differ materially from the expectations described
in such forward-looking statements, including the following: risks
related to the previously announced transaction among Vista
Outdoor, Revelyst, Inc. (“Revelyst”), CSG Elevate II Inc., CSG
Elevate III Inc. and CZECHOSLOVAK GROUP a.s. (the “Transaction”),
including (i) the failure to receive, on a timely basis or
otherwise, the required approval of the Transaction by our
stockholders, (ii) the possibility that any or all of the various
conditions to the consummation of the Transaction may not be
satisfied or waived, including the failure to receive any required
regulatory approvals from any applicable governmental entities (or
any conditions, limitations or restrictions placed on such
approvals), (iii) the possibility that competing offers or
acquisition proposals may be made, (iv) the occurrence of any
event, change or other circumstance that could give rise to the
termination of the merger agreement relating to the Transaction,
including in circumstances which would require Vista Outdoor to pay
a termination fee, (v) the effect of the announcement or pendency
of the Transaction on our ability to attract, motivate or retain
key executives and employees, our ability to maintain relationships
with our customers, vendors, service providers and others with whom
we do business, or our operating results and business generally,
(vi) risks related to the Transaction diverting management’s
attention from our ongoing business operations and (vii) that the
Transaction may not achieve some or all of any anticipated benefits
with respect to either business segment and that the Transaction
may not be completed in accordance with our expected plans or
anticipated timelines, or at all; risks related to the review of
strategic alternatives announced on July 30, 2024 (“Review”),
including (i) the terms, structure, benefits and costs of any
transaction that may result from the Review, (ii) the timing of any
such transaction that may result from the Review and whether any
such transaction will be consummated at all, (iii) the effect of
the announcement of the Review on our ability to attract, motivate
or retain key executives and employees, our ability to maintain
relationships with our customers, vendors, service providers and
others with whom we do business, or our operating results and
business generally, (iv) risks related to the Review diverting
management’s attention from our ongoing business operations, (v)
the costs or expenses resulting from the Review, (vi) any
litigation relating to the Review and (vii) the Review may not
achieve some or all of any anticipated benefits of the Review;
impacts from the COVID-19 pandemic on our operations, the
operations of our customers and suppliers and general economic
conditions; supplier capacity constraints, production or shipping
disruptions or quality or price issues affecting our operating
costs; the supply, availability and costs of raw materials and
components; increases in commodity, energy, and production costs;
seasonality and weather conditions; our ability to complete
acquisitions, realize expected benefits from acquisitions and
integrate acquired businesses; reductions in or unexpected changes
in or our inability to accurately forecast demand for ammunition,
accessories, or other outdoor sports and recreation products;
disruption in the service or significant increase in the cost of
our primary delivery and shipping services for our products and
components or a significant disruption at shipping ports; risks
associated with diversification into new international and
commercial markets, including regulatory compliance; our ability to
take advantage of growth opportunities in international and
commercial markets; our ability to obtain and maintain licenses to
third-party technology; our ability to attract and retain key
personnel; disruptions caused by catastrophic events; risks
associated with our sales to significant retail customers,
including unexpected cancellations, delays, and other changes to
purchase orders; our competitive environment; our ability to adapt
our products to changes in technology, the marketplace and customer
preferences, including our ability to respond to shifting
preferences of the end consumer from brick and mortar retail to
online retail; our ability to maintain and enhance brand
recognition and reputation; our association with the firearms
industry; others’ use of social media to disseminate negative
commentary about us, our products, and boycotts; the outcome of
contingencies, including with respect to litigation and other
proceedings relating to intellectual property, product liability,
warranty liability, personal injury, and environmental remediation;
our ability to comply with extensive federal, state and
international laws, rules and regulations; changes in laws, rules
and regulations relating to our business, such as federal and state
ammunition regulations; risks associated with cybersecurity and
other industrial and physical security threats; interest rate risk;
changes in the current tariff structures; changes in tax rules or
pronouncements; capital market volatility and the availability of
financing; foreign currency exchange rates and fluctuations in
those rates; general economic and business conditions in the United
States and our markets outside the United States, including as a
result of the war in Ukraine and the imposition of sanctions on
Russia, the conflict in the Gaza strip, the COVID-19 pandemic or
another pandemic, conditions affecting employment levels, consumer
confidence and spending, conditions in the retail environment, and
other economic conditions affecting demand for our products and the
financial health of our customers.
You are cautioned not to place undue reliance on any
forward-looking statements we make, which are based only on
information currently available to us and speak only as of the date
hereof. A more detailed description of risk factors that may affect
our operating results can be found in Part 1, Item 1A, Risk
Factors, of our Annual Report on Form 10-K for fiscal year 2024,
and in the filings we make with the SEC from time to time. We
undertake no obligation to update any forward-looking statements,
except as otherwise required by law.
No Offer or Solicitation
This communication is neither an offer to sell, nor a
solicitation of an offer to buy any securities, the solicitation of
any vote, consent or approval in any jurisdiction pursuant to or in
connection with the Transaction or otherwise, nor shall there be
any sale, issuance or transfer of securities in any jurisdiction in
contravention of applicable law. No offer of securities shall be
made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act of 1933, as amended, and otherwise
in accordance with applicable law.
Additional Information and Where to Find It
These materials may be deemed to be solicitation material in
respect of the Transaction. In connection with the Transaction,
Revelyst, a subsidiary of Vista Outdoor, filed with the SEC on
January 16, 2024 a registration statement on Form S-4 in connection
with the proposed issuance of shares of common stock of Revelyst to
Vista Outdoor stockholders pursuant to the Transaction, which Form
S-4 includes a proxy statement of Vista Outdoor that also
constitutes a prospectus of Revelyst (the “proxy
statement/prospectus”). INVESTORS AND STOCKHOLDERS ARE URGED TO
READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING OUR PROXY
STATEMENT/PROSPECTUS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION
ABOUT THE TRANSACTION AND THE PARTIES TO THE TRANSACTION. The
registration statement was declared effective by the SEC on March
22, 2024, and we have mailed the definitive proxy
statement/prospectus to each of our stockholders entitled to vote
at the meeting relating to the approval of the Transaction.
Investors and stockholders may obtain the proxy
statement/prospectus and any other documents free of charge through
the SEC’s website at www.sec.gov. Copies of the documents filed
with the SEC by Vista Outdoor are available free of charge on our
website at www.vistaoutdoor.com.
Participants in Solicitation
Vista Outdoor, Revelyst, CSG Elevate II Inc., CSG Elevate III
Inc. and CZECHOSLOVAK GROUP a.s. and their respective directors,
executive officers and certain other members of management and
employees, under SEC rules, may be deemed to be “participants” in
the solicitation of proxies from our stockholders in respect of the
Transaction. Information about our directors and executive officers
is set forth in our proxy statement on Schedule 14A for our 2024
Annual Meeting of Stockholders, which was filed with the SEC on
July 24, 2024, and subsequent statements of changes in beneficial
ownership on file with the SEC. These documents are available free
of charge through the SEC’s website at www.sec.gov. Additional
information regarding the interests of potential participants in
the solicitation of proxies in connection with the Transaction,
which may, in some cases, be different than those of our
stockholders generally, is also included in the proxy
statement/prospectus relating to the Transaction.
1 Represents implied enterprise values based on information
submitted to Vista Outdoor as part of MNC’s last proposal.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240917360896/en/
Investor Contact: Tyler Lindwall Phone: 612-704-0147
Email: investor.relations@vistaoutdoor.com
Media Contact: Eric Smith Phone: 720-772-0877 Email:
media.relations@vistaoutdoor.com
Grafico Azioni Vista Outdoor (NYSE:VSTO)
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Da Ott 2024 a Nov 2024
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