Vista Outdoor, Inc. is reporting that Czechoslovak Group (CSG) had increased its bid for The Kinetic Group, Vista Outdoor’s ammunition business, by $40 million from $1.96 billion to $2 billion. The higher offer comes as Institutional Shareholder Services (ISS) last week called on Vista Outdoor shareholders to abstain from voting to approve the sale.
ISS had recommended that shareholders approve the sale only three weeks ago, but it changed its position while citing risks that the sale to CSG could pass a U.S. national security review coupled with an existing alternative offer by MNC Capital to acquire Vista’s entire business. The proxy adviser recommended that shareholders support a plan whereby Vista adjourns the special meeting again and reengages with MNC.
CSG’s amended purchase agreement also increased the cash consideration payable to Vista Outdoor stockholders by $2.00 per share of Vista Outdoor common stock from $16.00 to $18.00 in cash, a 12.5 percent increase. Based on the amended merger agreement with CSG, Vista Outdoor stockholders would receive at the closing of the CSG transaction, per share of Vista Outdoor common stock, one share of common stock in Revelyst, its outdoor products business, and $18.00 in cash.
Vista Outdoor said that in light of the continued excess cash generation by the company, it would now be returning an additional approximately $77 million of excess cash to its stockholders as part of the cash consideration in the CSG transaction. This return of excess cash to Vista Outdoor stockholders is in addition to the increase in the purchase price payable by CSG, which will also be delivered to stockholders.
Vista Outdoor said, “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 said it is confident that the CSG transaction would maximize value for our stockholders by:
- Providing for a $2 billion purchase price, representing a $90 million increase from the original $1.91 billion purchase price,
- Allowing stockholders to benefit directly from additional excess cash generated by the company before closing,
- Delivering $18.00 in cash consideration per share at closing, representing a $5.10 increase from the original cash consideration of $12.90 per share, and
- Enable stockholders to capture the long-term intrinsic value embedded in Revelyst’s business plan as a standalone public company.
Vista Outdoor added, “CSG brings a strong commitment to U.S. manufacturing and our American workforce and deep expertise in supply chain excellence, ammunition manufacturing and support for NATO and allied nations. CSG’s ownership of Vista Outdoor’s leading ammunition brands will provide the communities where the company operates, along with its 4,000 workers in the United States, with a steady, long-term owner that is fully committed to investing in the American workforce, American hunters and domestic and allied military and law enforcement partners.”
Last October, Vista entered into a $1.91 billion deal to sell Kinetic, which includes the Federal, Remington, CCI, Hevi-Shot, and Speer ammunition brands, to CSG. In late May, CSG raised its offer by $50 million to $1.96 billion. The updated offer also increased the cash consideration payable to Vista stockholders to $16.00 in cash.
MNC initially offered $35.00 a share to acquire Vista Outdoor in February outright and raised its offer to $37.50 a share, or $3 billion, on March 25. On June 10, Vista rejected MNC’s upgraded offer, calling it still unfavorable to the CSG spinoff plan.
Vista, on June 10, also reported it received an all-cash $2 billion takeover offer for its ammunition business from JDH Capital, the investment group run by Texas oil billionaire Jeffrey Hildebrand. JDH acquired Savage, a firearms manufacturer, from Vista Outdoor in 2019 and Clarus’ Precision Sport segment, including Sierra Bullets and Barnes Bullets, in April of this year. By June 17, Vista reported that JDH had withdrawn its offer due to pressure from MNC.
The CSG sale would leave Vista’s non-firearm division, Revelyst, as a standalone public company. Revelyst operates three segments: Adventure Sports (Fox Racing, Bell, Giro, CamelBak, QuietKat, and Blackburn); Outdoor Performance (Simms, Bushnell, Blackhawk, Stone Glacier, Camp Chef, and Primos) and Precision Sports and Technology (Foresight Sports, Bushnell Golf and Pinseeker).
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 the United States (CFIUS) and other customary closing conditions.
The company said it remains confident in receiving CFIUS clearance for the transaction and that all other closing conditions will be satisfied.
Image courtesy True Shot
See below for more SGB Media coverage of this ongoing saga.
EXEC: Vista Sees Proxy Advisor Change View on Ammo Group Sale; Suggests MNC Re-Look
Vista Outdoor Sees Enhanced Ammo Business Bid from CSG; Again Rejects MNC Interest
