CFIUS Clears Sale of The Kinetic Group to CSG
Vista Outdoor (NYSE: VSTO) and Czechoslovak Group (CSG) announced that the Committee on Foreign Investment in the United States (CFIUS) has cleared CSG's proposed acquisition of Vista Outdoor's The Kinetic Group. This marks the final regulatory approval needed to close the transaction. A special meeting of Vista Outdoor stockholders is scheduled for July 2, 2024, to vote on the merger agreement. The Board of Directors recommends stockholders vote in favor. The transaction offers a $2 billion purchase price, $90 million higher than initially proposed, and provides $18.00 in cash per share, up from $12.90. Morgan Stanley & Co. and Cravath, Swaine & Moore LLP are advising Vista Outdoor.
- CFIUS clearance marks the final regulatory approval needed for the transaction.
- Increased purchase price to $2 billion, a $90 million uptick from the original proposal.
- Stockholders to receive $18.00 in cash per share, up from $12.90.
- Deal expected to maximize stockholder value.
- None.
Insights
The CFIUS clearance for the sale of The Kinetic Group to Czechoslovak Group (CSG) is a pivotal step in the transaction process. For retail investors, the most significant aspect is the
The adjustment in the cash consideration to
In short-term, investors can expect a direct financial benefit from the increased purchase price and cash consideration per share. However, the long-term implications depend on how effectively the remaining business segments can leverage the influx of capital and focus on core operations. Potential risks include integration challenges and market competition faced by the new entity.
From a market perspective, the clearance by CFIUS removes a critical regulatory hurdle, ensuring that geopolitical concerns will not impede the transaction. CSG’s acquisition of The Kinetic Group aligns with the strategic consolidation trends seen in the ammunition and defense industry, where companies look to strengthen their supply chain and manufacturing capabilities.
It's noteworthy that CSG's support for NATO and allied nations is emphasized, potentially signaling a strategic advantage in securing defense contracts and expanding market presence. This could translate into sustained demand and revenue stability for The Kinetic Group under new ownership, benefiting stakeholders in the extended run.
For retail investors, understanding the broader market dynamics and the strategic positioning of CSG is crucial. They should monitor how this acquisition influences competitive positioning and market shares in the ammunition sector. Short-term, the market may react positively to the stability and strategic foresight displayed by both companies in completing this deal.
Represents Final Regulatory Approval Required to Close the Transaction
Board of Directors Continues to Recommend Stockholders Vote in Favor of Merger Agreement Proposal at Special Meeting on July 2, 2024
Michael Callahan, Chairman of the Board of Directors, said “We are very pleased that CFIUS has carefully vetted the Transaction and, as we expected, determined that there are no unresolved national security concerns.”
CFIUS is an interagency committee of the
“The CFIUS process involved a thorough review and investigation of the Transaction by numerous
The closing of the Transaction remains subject to receipt of the approval of Vista Outdoor’s stockholders and other customary closing conditions. The special meeting of Vista Outdoor stockholders to, among other things, consider and vote on a proposal to adopt the merger agreement with CSG is scheduled to be held virtually on July 2, 2024, at 9:00 a.m. Central Time.
The Board continues to recommend Vista Outdoor stockholders vote in favor of the proposal to adopt the merger agreement with CSG. Vista Outdoor is confident that the Transaction will maximize value for our stockholders by
-
Providing for a
$2 billion $90 million $1.91 billion - Allowing stockholders to benefit directly from additional excess cash generated by the Company prior to closing,
-
Delivering
$18.00 $5.10 $12.90 - Enabling stockholders to capture the long-term intrinsic value that is embedded in Revelyst’s business plan as a standalone public company.
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 (Revelyst) and Sporting Products (The Kinetic Group), 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.
About Revelyst
Revelyst, a segment of Vista Outdoor Inc. (NYSE: VSTO), is a collective of world-class maker brands that design and manufacture performance gear and precision technologies. Our category-defining brands leverage meticulous craftsmanship and cross-collaboration to pursue new innovations that redefine what is humanly possible in the outdoors. Portfolio brands include Foresight Sports, Bushnell Golf, Fox, Bell, Giro, CamelBak, Bushnell, Simms Fishing and more. For more information, visit our website at www.revelyst.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’s 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 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, its ability to maintain relationships with its customers, vendors, service providers and others with whom it does business, or its 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; 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; 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
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 Securities and Exchange Commission (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 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 2023 Annual Meeting of Stockholders, which was filed with the SEC on June 12, 2023, 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240625971368/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
Source: Vista Outdoor Inc.
FAQ
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