CSG Urges Vista Outdoor Stockholders to Vote for its $2.15 Billion Acquisition of The Kinetic Group and $150 Million Investment in Revelyst

Rhea-AI Summary

Czechoslovak Group (CSG) reaffirms its commitment to acquire Vista Outdoor's The Kinetic Group for $2.15 billion and invest $150 million in Revelyst. CSG urges Vista Outdoor stockholders to vote in favor of the transaction at the October 9th special meeting, emphasizing it's the last opportunity before the October 15th termination date. CSG won't agree to further adjournments.

CSG is in dialogue with Vista Outdoor and a private equity firm regarding a potential sale of Revelyst, separate from MNC Capital. However, CSG notes challenges with the private equity firm's latest proposal, which would require unfavorable amendments to CSG's agreement with Vista Outdoor. While discussions continue, CSG cautions that significant obstacles remain.

Positive

• CSG's fully financed transaction offers $2.15 billion in cash for The Kinetic Group
• CSG commits to invest $150 million for a 7.5% stake in Revelyst
• Potential sale of Revelyst to a private equity firm could add value to the deal

Negative

• October 15th termination date approaching, limiting time for deal completion
• Challenges in negotiations with the private equity firm for Revelyst sale
• Potential adverse amendments to CSG's agreement with Vista Outdoor

Insights

Financial Analyst

The proposed $2.15 billion acquisition of The Kinetic Group and $150 million investment in Revelyst by CSG represents a significant transaction for Vista Outdoor. This deal offers immediate cash value to VSTO shareholders, which is particularly noteworthy given the company's current market cap of $1.97 billion.

The urgency surrounding the October 9th special meeting and the October 15th termination date adds pressure to the decision-making process. CSG's firm stance against further adjournments indicates their commitment to the deal's current terms.

The potential sale of Revelyst to a private equity firm introduces additional complexity. While it could provide further value, the "notable challenges" mentioned suggest potential risks or disagreements that could impact the overall transaction. Investors should carefully weigh the certainty of the CSG offer against the potential, but uncertain, upside of alternative scenarios.

M&A Specialist

This transaction represents a significant premium to Vista Outdoor's current market capitalization, potentially unlocking substantial value for shareholders. The structure of the deal - cash for The Kinetic Group and shares in Revelyst - offers a mix of immediate returns and future upside.

CSG's $150 million investment for a 7.5% stake in Revelyst implies a valuation of $2 billion for that entity, which is noteworthy. The ongoing negotiations with a private equity firm for Revelyst add another layer of potential value, but also uncertainty.

The tight timeline and CSG's unwillingness to extend deadlines create a high-pressure situation for VSTO shareholders. This urgency could be a strategic move to prevent competing bids or renegotiations. Shareholders must carefully consider the bird-in-hand offer against potential alternatives, keeping in mind the risks of deal failure if not approved by October 15th.

October 9^th Special Meeting is Last Possible Date for Vista Outdoor Stockholders to Vote to Approve CSG Merger Agreement Ahead of October 15^th Termination Date; CSG Will Not Agree to Any Further Adjournment of Special Meeting

CSG Continues to Engage with Private Equity Firm to Reach Mutually Acceptable Agreement Regarding Potential Sale of Revelyst; Cautions that Notable Challenges Remain

PRAGUE--(BUSINESS WIRE)-- Czechoslovak Group ("CSG" or the “Company”), a leading global industrial holding company, today reaffirmed its commitment to successfully completing the transaction with Vista Outdoor Inc. (NYSE: VSTO) ("Vista Outdoor") to acquire The Kinetic Group for $2.15 billion and invest $150 million in Revelyst (the “CSG Transaction”).

CSG urges all Vista Outdoor stockholders to vote in favor of the CSG Transaction at Vista Outdoor’s October 9^th special meeting. CSG will not agree to any further adjournment of the Vista Outdoor special meeting and reiterates that October 9^th is the last possible date for Vista Outdoor to hold its special meeting of stockholders ahead of the October 15^th termination date in the merger agreement.

Michal Strnad, Chief Executive Officer and the owner of CSG, commented, “We are committed to executing our fully financed transaction with Vista Outdoor, which we believe maximizes value for Vista Outdoor stockholders. With the October 15^th termination date for the transaction fast approaching, the upcoming October 9^th special meeting will be the last and final opportunity for Vista Outdoor stockholders to vote to receive $2.15 billion in cash value for The Kinetic Group and shares of Revelyst – in which CSG has committed to invest $150 million for a 7.5% stake.”

CSG has been in active dialogue with Vista Outdoor and the private equity firm partnered with MNC Capital (the “Private Equity Firm”), regarding a potential sale of Revelyst, separate and apart from MNC. CSG notes that the Private Equity Firm’s most recent proposal to acquire Revelyst would require CSG to amend the terms of its agreement with Vista Outdoor in a manner adverse to CSG. CSG will continue its discussions with the Private Equity Firm; however, there is no certainty any such agreement will be reached or that CSG would agree to the terms the Private Equity Firm is seeking to impose on CSG.

Strnad continued, “We remain open minded and are working in good faith with the Private Equity Firm and Vista Outdoor to see if a mutually beneficial outcome can be achieved; however, we continue to have serious concerns with the Private Equity Firm’s latest proposal. While we will continue to engage with the Private Equity Firm, there remain notable challenges that need to be overcome.”

About CSG

The global industrial and technological group CSG, owned by Czech entrepreneur Michal Strnad, has key production facilities in the Czech Republic, Slovakia, Spain, Italy, India, the UK, and the U.S. and exports its products worldwide. CSG is continuously investing into the development of its companies while expanding in its core business areas. The Group includes, for example, the Czech truck manufacturer Tatra Trucks, the world's leading manufacturer of small caliber ammunition Fiocchi, and the Czech radar manufacturer Eldis. More than 10,000 employees work in the companies included in the CSG group and in their associated companies. In 2023, the Group's consolidated sales reached USD 1.73 billion. CSG's main fields of activity are the engineering, automotive, rail, aerospace, and defense industries and small caliber ammunition production. CSG's products can be found on all continents thanks to its strong export orientation.

CSG´s companies in Europe are major suppliers of tanks, artillery systems and high caliber ammunition for Ukraine which is co-financed also by the U.S. and other NATO member states.

J.P. Morgan is acting as sole financial adviser to CSG with Clifford Chance LLP acting as legal adviser.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240924599855/en/

Media contacts:

United States:

Dan Zacchei / Joe Germani Longacre Square Partners dzacchei@longacresquare.com / JGermani@longacresquare.com

CSG Corporate:

Andrej Čírtek

+420 602 494 208 e-mail: andrej.cirtek@czechoslovakgroup.cz

Source: Czechoslovak Group

FAQ

What is the value of CSG's offer for Vista Outdoor's The Kinetic Group?

CSG's offer for Vista Outdoor's The Kinetic Group is $2.15 billion in cash.

When is the special meeting for Vista Outdoor (VSTO) stockholders to vote on the CSG transaction?

The special meeting for Vista Outdoor (VSTO) stockholders to vote on the CSG transaction is scheduled for October 9th.

What is the termination date for the CSG-Vista Outdoor merger agreement?

The termination date for the CSG-Vista Outdoor merger agreement is October 15th.

How much is CSG planning to invest in Revelyst as part of the Vista Outdoor (VSTO) deal?

CSG is planning to invest $150 million for a 7.5% stake in Revelyst as part of the Vista Outdoor (VSTO) deal.