Vista Outdoor Reaffirms Recommendation for CSG Transaction
Vista Outdoor has reaffirmed its recommendation for stockholders to vote in favor of a $1.96 billion cash merger agreement with Czechoslovak Group (CSG). The company remains confident in receiving clearance from the Committee on Foreign Investment in the United States (CFIUS) and satisfying all closing conditions. This follows the withdrawal of a higher $2.0085 billion offer from a U.S.-based private investment firm, which was pressured by MNC Capital Partners due to alleged contractual violations. Vista Outdoor believes CSG will be a beneficial owner for The Kinetic Group.
- Vista Outdoor is pursuing a $1.96 billion cash merger with Czechoslovak Group (CSG).
- Full confidence in receiving CFIUS clearance for the transaction.
- CSG has strong expertise in supply chain management and ammunition manufacturing.
- CSG is committed to U.S. manufacturing and the American workforce.
- The merger is expected to maximize value for Vista Outdoor stockholders.
- A higher $2.0085 billion offer was withdrawn due to pressure from MNC Capital Partners.
- Allegations of contractual violations could imply potential legal complications.
Insights
The reaffirmation of Vista Outdoor's recommendation for the merger with CSG is significant for several reasons. Firstly, the transaction value of
From a financial stability perspective, securing CFIUS clearance is pivotal. CFIUS examines the national security implications of transactions that could result in foreign control of U.S. businesses. Successful clearance would mitigate potential delays or legal complications that could impact stock prices negatively in the short term. Furthermore, the disruption caused by the withdrawal of the alternative offer—initially valued slightly higher at
In the short term, the reaffirmation provides investors with clarity and reduces speculative volatility. Long-term, assuming all conditions are satisfied, the completion of this transaction could streamline Vista Outdoor's portfolio, possibly enhancing profitability and operational focus. It's important to monitor how the capital from this acquisition will be used and whether it effectively translates to shareholder value.
The withdrawal of the alternative party's offer due to alleged contractual violations with MNC Capital Partners introduces a layer of legal complexity. If the allegations against the alternative party hold merit, it could face legal repercussions that might have otherwise delayed or complicated the transaction. The timely awareness and resolution of this issue by Vista Outdoor demonstrate proficient management, mitigating potential legal risks that could have impacted the transaction's timeline and feasibility.
Moreover, the ongoing confidence in receiving CFIUS clearance indicates a thorough due diligence process, which is essential when dealing with foreign acquisitions. This regulatory hurdle is often a deal-breaker for similar transactions, especially given the heightened scrutiny of foreign investments in U.S. businesses from a national security perspective. The ability to navigate these legal and regulatory challenges skillfully reflects positively on Vista Outdoor's legal advisors and corporate governance practices.
For retail investors, understanding these legal dynamics is vital. Legal complications can introduce significant delays and uncertainties, impacting stock prices and investor confidence. The swift handling and transparent communication of these issues bode well for investor sentiment and company integrity.
From a market perspective, Vista Outdoor's decision to proceed with CSG, despite a higher offer from an alternative party, can be interpreted as a strategic move prioritizing reliability and long-term partnership over immediate monetary gain. CSG's background in U.S. manufacturing, supply chain excellence and defense support aligns well with Vista Outdoor’s strategic goals, which could lead to enhanced operational synergies and market positioning.
The vote scheduled for July 2 will be a critical date for investors to monitor. A successful shareholder vote in favor of the CSG transaction would indicate strong alignment between management and shareholders, fostering a unified approach towards future growth and stability. Additionally, the emphasis on CSG’s commitment to the American workforce and operational expertise should reassure stakeholders about the continuity and potential upgrading of the company’s capabilities.
For retail investors, understanding these strategic alignments and the broader market implications can provide deeper insights into the potential long-term benefits of this transaction. While the immediate cash value is clear, the strategic fit and operational integration offer additional layers of value that could unfold over time.
Provides Update on Offer from Alternative Party to Acquire The Kinetic Group
This reaffirmation follows the withdrawal by the
The Company has learned that MNC has alleged that the alternative party violated certain contractual agreements between the alternative party and MNC that purportedly restricted the alternative party’s ability to submit an offer for the Kinetic Group. Vista Outdoor only became aware of these agreements last week and understands they were entered into in connection with MNC’s and the alternative party’s consideration of a joint bid for The Kinetic Group as part of the prior sales process for that business in 2023. Vista Outdoor understands that the alternative party disputes the merits of MNC’s allegations.
“While it is unfortunate that MNC apparently caused the alternative party’s indication of interest to be withdrawn, we firmly believe that completing the transaction with CSG will be a great outcome for our stockholders,” said Michael Callahan, Chairman of the Board. “CSG will be an excellent owner of The Kinetic Group with a strong commitment to
The Vista Outdoor Board takes its fiduciary responsibilities seriously and is deeply committed to maximizing value for all of Vista Outdoor’s stockholders. The Vista Outdoor Board is always receptive to opportunities that will help Vista Outdoor achieve that goal.
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 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/20240617645902/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.
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