Vista Outdoor Inc. (NYSE: VSTO) has entered into two major agreements that could reshape the future of the company and drive significant value for stockholders. The company announced an agreement to sell Revelyst to Strategic Value Partners, LLC (SVP) for $1.125 billion, while increasing the purchase price of The Kinetic Group by Czechoslovak Group (CSG) to $2.225 billion. Together, these deals are estimated to deliver approximately $45 per share in cash to Vista Outdoor stockholders. The agreements are a pivotal move for Vista Outdoor as they aim to streamline operations, unlock value, and focus on core strengths, driving long-term shareholder value.

Vista Outdoor Seals $3.35 Billion Dual Transactions

Vista Outdoor has agreed to sell its Revelyst division to SVP for an enterprise value of $1.125 billion. Simultaneously, the company has agreed to amend the purchase terms for the acquisition of The Kinetic Group by CSG, increasing the price to $2.225 billion. Both deals are contingent, with the SVP transaction depending on the successful completion of the CSG transaction.

Vista Outdoor Chairman Michael Callahan emphasized that the board worked diligently to identify opportunities that would maximize value for investors, stating that these deals represent a pathway reflecting the true strength of both Revelyst and The Kinetic Group. Callahan reiterated the board’s commitment to enhancing shareholder returns, noting that the transactions provide a comprehensive solution that benefits the company’s stakeholders by enhancing the overall value proposition.

These dual transactions are seen as a significant milestone in Vista Outdoor’s broader strategy to optimize its portfolio and focus on high-growth areas within the outdoor and sporting goods sector. By divesting Revelyst and acquiring The Kinetic Group, Vista Outdoor is not only securing immediate liquidity but also positioning itself to strengthen its capabilities in ammunition and sporting goods, which are its primary growth engines.

SVP’s Vision for Revelyst

David Geenberg, Head of SVP’s North American Corporate Investment Team, highlighted the strength of Revelyst’s brand portfolio in the outdoor sector. He pointed out that the business has a unique opportunity to expand its market share due to its focus on consumer satisfaction and ongoing operational improvements. Geenberg expressed enthusiasm in partnering with Revelyst’s leadership to drive growth using SVP’s resources.

Geenberg further elaborated that SVP sees great potential in Revelyst’s ability to capitalize on the increasing demand for premium outdoor products. The firm plans to leverage its expertise in operational efficiencies, supply chain management, and strategic partnerships to help Revelyst unlock new opportunities for growth and expansion. SVP believes that with the right resources and a strategic focus on innovation, Revelyst can substantially increase its footprint in the outdoor market and achieve a significant competitive advantage.

The outdoor industry has been experiencing a surge in consumer interest, driven by a growing trend toward health and wellness, outdoor activities, and adventure sports. Revelyst is uniquely positioned to cater to this rising demand, and SVP aims to harness this momentum by driving further investments in product innovation, marketing, and brand development. Geenberg emphasized that the partnership with Revelyst’s experienced leadership team will be instrumental in realizing the company’s full potential.

CSG Bets Big on The Kinetic Group

Michal Strnad, CEO of CSG, shared his excitement about adding The Kinetic Group to CSG’s portfolio, noting that the brand has an impressive heritage of delivering innovative, high-quality products. He promised significant investment and resources to help the company grow further, adding that this acquisition is a win for Vista Outdoor’s shareholders, employees, and the American economy.

Strnad explained that The Kinetic Group’s capabilities in producing high-quality ammunition products align perfectly with CSG’s vision of being a leader in the defense and manufacturing sectors. He emphasized that the acquisition will not only expand CSG’s product offerings but also strengthen its market position in North America. Strnad noted that The Kinetic Group’s legacy of excellence and commitment to quality make it an ideal fit for CSG, which is looking to enhance its footprint in international markets.

The Kinetic Group’s extensive product lineup, including its innovative ammunition and defense-related solutions, is expected to complement CSG’s existing offerings and create significant synergies. Strnad assured that the company would provide ample resources and investment to ensure The Kinetic Group continues its tradition of innovation while expanding its production capabilities. He added that this acquisition represents a critical step for CSG in its mission to diversify and grow its presence in key international markets.

Deal Structure and Regulatory Approvals

Both transactions are expected to close in early 2025, with the SVP transaction contingent on the closing of the CSG deal. Vista Outdoor and CSG have secured regulatory approvals for the merger, but still require shareholder approval. At the close of the CSG transaction, Vista Outdoor shareholders will receive $25.75 in cash per share and one share of Revelyst for each Vista Outdoor share they hold.

In total, these transactions will generate a combined $3.35 billion enterprise value for Vista Outdoor, with stockholders set to receive an estimated $45 per share in cash. The company’s management believes that these transactions represent a well-balanced approach to delivering both short-term liquidity and long-term growth potential for shareholders. The restructuring allows Vista Outdoor to strengthen its position in core segments while providing the capital necessary to pursue new growth initiatives and strategic investments.

The regulatory approval process has been smooth, with both Vista Outdoor and CSG working closely with authorities to ensure compliance. The merger agreements have received clearance from regulatory bodies, and the companies are now focused on securing shareholder consent. The board has expressed confidence in gaining the necessary support, citing the comprehensive benefits that the transactions offer to stakeholders.

Advisors to the Deal

Vista Outdoor was advised by Morgan Stanley & Co. LLC, with Cravath, Swaine & Moore LLP as legal advisors, while Moelis & Company LLC and Gibson, Dunn & Crutcher LLP supported the independent directors. J.P. Morgan served as CSG’s financial advisor, with Clifford Chance LLP providing legal guidance.

Morgan Stanley’s role in advising Vista Outdoor has been pivotal in structuring the transactions to maximize shareholder value while ensuring a smooth transition. The expertise provided by Cravath, Swaine & Moore LLP in navigating the legal complexities of the deals has been instrumental in securing favorable terms for Vista Outdoor. Similarly, Moelis & Company LLC played a crucial role in representing the interests of the independent directors, ensuring that the transactions align with their fiduciary responsibilities.

On the other hand, CSG’s engagement with J.P. Morgan and Clifford Chance LLP has helped them structure a compelling acquisition that not only benefits Vista Outdoor but also fits well within CSG’s broader strategic objectives. The combined expertise of these advisors has been central to crafting agreements that deliver value and position both companies for long-term success.

  Clifford Chance LLP, CSG, David Geenberg, J.P. Morgan, Michael Callahan, Michal Strnad, Morgan Stanley, Revelyst, SVP, The Kinetic Group, Vista Outdoor