CSG Increases Purchase Price for The Kinetic Group Business to $2 Billion
Vista Outdoor (NYSE: VSTO) has amended its merger agreement with Czechoslovak Group (CSG), increasing the purchase price for The Kinetic Group business from $1.96 billion to $2 billion. This amendment also raises the cash consideration for stockholders by $2 per share, totaling $18 per share. The deal, expected to close in 2024, is subject to stockholder approval and regulatory clearance. Vista Outdoor will return an additional $77 million in excess cash to shareholders. The transaction, advised by Morgan Stanley and Cravath, Swaine & Moore for Vista Outdoor, and Moelis & Company and Gibson, Dunn & Crutcher for Vista's independent directors, is projected to maximize stockholder value.
- The purchase price increased by $40 million, raising the total to $2 billion.
- Cash consideration per share increased to $18, a 12.5% increase from $16.
- Additional $77 million excess cash to be returned to shareholders.
- Vista Outdoor stockholders receive one share of Revelyst common stock and $18 per share at closing.
- CSG's strong commitment to U.S. manufacturing and workforce investment.
- The transaction is still subject to shareholder approval and CFIUS clearance.
- Potential delays or complications in receiving regulatory clearance.
Insights
The acquisition price increase to
Moreover, the deal structure, which includes shareholders receiving one share of Revelyst common stock in addition to the cash, aims to maximize both short-term liquidity and long-term value. The company’s confident stance on receiving CFIUS clearance suggests that regulatory hurdles are well-prepared, minimizing risks for shareholders.
From a financial perspective, this incremental increase in purchase price and cash returns highlights that Vista Outdoor is leveraging its strong cash flows effectively. Investors should view this as a positive move, indicative of both immediate and future value creation.
The deal enhances the attractiveness of Vista Outdoor’s stock by providing immediate liquidity and potential for long-term growth. The 12.5% increase in cash consideration per share to
Receiving a share in Revelyst offers an opportunity for shareholders to participate in a standalone business endeavor, potentially capturing compounded growth over time. The reiteration of support for U.S. manufacturing and workforce by CSG further solidifies the strategic integration and long-term commitment, which can bolster investor confidence.
This transaction is a strategic move to maximize shareholder value by balancing immediate returns and future growth opportunities. The market will likely view this development positively, considering the comprehensive benefits to shareholders and the strong financial positioning of both entities involved.
Purchase Price Increased by Additional
Cash Consideration Increased to
Remains Confident in Receiving CFIUS Clearance for the CSG Transaction
Urges Shareholders to Vote in Favor of CSG Transaction
The amended agreement further increases the base purchase price payable by CSG for the acquisition of The Kinetic Group business (the “CSG Transaction”) by
In light of the continued excess cash generation by Vista Outdoor, Vista Outdoor will now be returning an additional approximately
Vista Outdoor is fully committed to the CSG Transaction and its Board of Directors reaffirms its recommendation that its stockholders vote in favor of the CSG Transaction. Vista Outdoor is confident that the CSG 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.
CSG brings a strong commitment to
The CSG Transaction is expected to close in calendar year 2024 subject to approval of Vista Outdoor’s stockholders, receipt of clearance by the Committee on Foreign Investment in
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; 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/20240623632584/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
What is the increased purchase price for The Kinetic Group business in the CSG transaction?
How much cash consideration will Vista Outdoor stockholders receive per share in the CSG transaction?
When is the CSG transaction expected to close?
How much excess cash will be returned to Vista Outdoor shareholders in the CSG transaction?
What approvals are needed for the CSG transaction to proceed?
