Vista Outdoor adjourned its shareholder vote on the sale of The Kinetic Group, its ammunition business, to the Czechoslovak Group (CSG) to pursue a more extensive review of “strategic alternatives,” including a sale of its Revelyst outdoor products business and selling the company outright to MNC Capital.

This latest delay marks the fourth time the company has adjourned the vote process.

Stockholders had been scheduled to vote on Tuesday, July 30, on the $2.15 billion deal to sell Vista’s The Kinetic Group, which includes the Federal, Remington, CCI, Hevi-Shot, and Speer ammunition brands to CSG. As part of the CSG transaction, Vista shareholders would receive $24 in cash consideration for each Vista share they hold, plus a share of Revelyst, which includes 15 outdoor and golf brands (Bushnell, CamelBak, Bushnell Golf, Foresight Sports, Fox Racing, Bell Helmets, Camp Chef, Giro, Simms Fishing, QuietKat and Stone Glacier).

Several companies with equity stakes in Vista, including Gamco Asset Management, Gates Capital Management, and TIG Advisors, had issued statements in recent weeks opposing the CSG deal due, in large part, to doubts about Revelyst’s prospects as a stand-alone, publicly held company, increasing the likelihood that shareholders would have voted against the CSG sale.

See below for additional SGB Media coverage of the back and forth on support for the CSG deal.

In a statement issued on Tuesday morning, July 30, Vista said the strategic alternatives it is exploring include the following:

  • There are a wide range of other options for the Revelyst business, including a potential sale. CSG is also considering acquiring Revelyst with potential partners in addition to its proposed acquisition of The Kinetic Group.
  • Engagement with MNC and its private equity partner concerning its proposal to acquire Vista Outdoor to see if it can deliver value for the company’s stockholders. This follows MNC’s recent public statement on July 26 that “if there were a reason or basis to increase our offer, including Vista engaging with us and providing one, we would increase our offer price.” In light of this recent statement, the Board determined that MNC’s proposal would reasonably be expected to lead to a “superior proposal” and would meet the standard for engagement under the terms of the CSG merger agreement. Considering the “extensive diligence” conducted by MNC and its private equity partner to date, Vista Outdoor expects MNC to be able to confirm an increased proposal for the acquisition of Vista Outdoor shortly.
  • Vista’s continued consideration of separating the Revelyst business and The Kinetic Group through a spin-off.

Vista said its Board remains committed to acting in the company’s and its stockholders’ best interests.

“We recognize the continuing support received from many of our stockholders for the CSG transaction and the feedback from some of our stockholders with respect to other strategic alternatives,” said Mike Callahan, chairman of the Board of Directors. “We take the views of our stockholders very seriously and believe it is prudent to evaluate all strategic alternatives. In addition to engaging with CSG and MNC and its private equity partner, we also look forward to reviewing any other strategic alternative for Vista Outdoor that would maximize value for stockholders. While we conduct this strategic review, we remain as focused as ever on delivering high-quality, innovative products for our consumers around the world.”

Vista Outdoor will adjourn the special meeting of stockholders scheduled for July 30 at 9:00 a.m. CST to September 13 at 9:00 a.m. CST. Vista said, “The Board continues to recommend that Vista Outdoor stockholders vote in favor of the proposal to adopt the merger agreement with CSG at the Special Meeting.”

CSG made its initial offer to acquire Kinetic last October and has raised its bid four times under pressure from the arrival of higher offers from MNC. With CSG’s last move on July 22 to increase its offer, Vista noted that CSG had increased its bid by $430 million, or $7.25 per share, since its original offer, and the deal “enables stockholders to receive 100 percent of the cash that the company has generated in the interim period plus retain the upside in Revelyst.”

Although the business continues to struggle, Vista has also forecasted Revelyst’s EBITDA would double by fiscal 2025 with the support of a “Gear Up” cost-improvement plan. In mid-July, Vista forecasted Revelyst sales would decline 14 percent in its fiscal first quarter ended July 30.

In early March, MNC submitted its first proposal to acquire Vista in its entirety for $35 a share and has since increased its offer three times. Its latest bid was $3.2 billion, or $42 per share.

Morgan Stanley & Co., LLC is acting as Vista Outdoor’s sole financial adviser, and Cravath, Swaine & Moore LLP is acting as its legal adviser. Moelis & Company, LLC is acting as sole financial adviser to the independent directors of Vista Outdoor and Gibson, Dunn & Crutcher LLP is acting as their legal adviser.

Image courtesy Vista Outdoor

Read more SGB Media coverage of the ongoing Vista Outdoor saga below:

EXEC: Investor Pressure Builds on Vista Outdoor Ahead of Ammo Sale Vote

Vista Outdoor Delays Stockholder Vote Again as CSG Raises Bid for Ammo Unit

Vista Outdoor Again Postpones Shareholder Vote on CSG Transaction