Vista Outdoor, Inc. has entered into an amendment to the merger agreement with the Czechoslovak Group a.s. (CSG), which increases the purchase price payable by CSG for the acquisition of Vista’s ammunition business, The Kinetic Group, by $100 million to $2.1 billion. The amendment also increases the cash consideration payable to Vista Outdoor stockholders by $3.00 per share of Vista Outdoor common stock to $21.00 in cash.

The Vista Outdoor Board of Directors unanimously reaffirmed its recommendation that Vista stockholders vote in favor of the CSG Transaction. This would leave behind the company’s outdoor products segment, now referred to as Revelyst, as an independent, publicly traded company.

Following consultation with its financial and legal advisors, the Board has unanimously rejected the unsolicited indication of interest received from MNC Capital on June 26, 2024, under which MNC expressed its final effort to acquire all of Vista Outdoor, including both the ammunition and outdoor segments in an all-cash transaction for $42.00 per share.

The Board said it determined that the MNC Final Indication would not be more favorable to Vista Outdoor stockholders from a financial point of view and would not reasonably be expected to be superior to the transactions contemplated by the CSG Transaction. Given MNC’s public statement that it “cannot see any possible basis or reason to further raise [its proposal],” the Board determined that MNC’s Final Indication does not meet the standard for engagement under the merger agreement with CSG.

Vista Outdoor said it has engaged extensively with MNC Capital since MNC’s initial outreach in September 2022. During this time, Vista Outdoor reported providing MNC access to approximately 4,900 documents, answering over 1,050 data requests, holding over 35 meetings or calls, giving extensive access to the management team, and supporting multiple site tours. Despite these efforts, MNC’s Final Indication significantly undervalues Vista Outdoor, especially the Revelyst business.

Vista Outdoor said in a release that Revelyst has a significant opportunity to realize high value for stockholders as a pure-play standalone outdoor company when separated from The Kinetic Group, with expanded opportunities and the strengthened ability to attract and retain talent.

Upon completing the CSG transaction, Vista said Revelyst would have approximately $250 million in net cash, positioning Revelyst, under its new management, to execute its capital allocation strategy. Vista Outdoor reaffirmed its annual guidance to double standalone Revelyst EBITDA in fiscal year 2025, with a clear path to achieving over $100 million in run-rate cost savings by fiscal year 2027 and mid-teens EBITDA margins long-term.

Key highlights of the Board-Recommended CSG Transaction include:

  1. CSG’s $2.1 billion purchase price delivers $7 to $16 per share more value to stockholders than MNC’s Final Indication.
  2. As a result of the CSG Transaction, Vista Outdoor stockholders lock in the value of The Kinetic Group and participate in Revelyst’s projected growth while retaining the ability to realize a potential change of control premium for Revelyst in the future.
  3. Vista Outdoor and CSG have received all regulatory approvals required under the merger agreement and are prepared to close in July 2024, subject to receipt of stockholder approval and satisfaction of other customary closing conditions.
  4. The CSG Transaction results from a competitive and exhaustive multi-stage process, including outreach to 26 potential buyers.
  5. At the closing of the CSG Transaction, Vista Outdoor stockholders will receive one share of Revelyst common stock and $21.00 in cash, in each case, per share of Vista Outdoor common stock. The CSG Transaction crystallizes significant value and mitigates future market risk for The Kinetic Group today.
  6. Vista Outdoor’s financial advisors each delivered an opinion on the financial fairness of the consideration in the CSG Transaction to the stockholders of Vista Outdoor’s common stock.

Key Highlights Regarding MNC’s Final Indication:

  1. MNC is using Vista Outdoor’s cash generation to fund its increased proposals. The value to Vista Outdoor stockholders of the CSG Transaction has improved relative to MNC by approximately $1.75 per share.
  2. MNC’s Final Indication does not consider the significant projected EBITDA expansion at Revelyst under new management or the ability of Vista Outdoor stockholders to realize a potential change of control premium for Revelyst in the future.
  3. A transaction with MNC would take multiple months to close. MNC has never completed a transaction; its financing includes new debt and equity partners relative to its prior offers, and the MNC Final Indication remains subject to additional due diligence.
  4. The Board is open to opportunities to maximize stockholder value. It may consider pursuing a change of control transaction for Revelyst at the appropriate time and valuation; however, the Board believes that the MNC Final Indication significantly undervalues Revelyst and that MNC is seeking to capture, outside of a sale process and at a significant discount, the value of Revelyst which under the CSG Transaction would remain with Vista Outdoor stockholders.
  5. Each of Vista Outdoor’s financial advisors has delivered an opinion as to the financial inadequacy of the MNC Final Indication to the holders of Vista Outdoor’s common stock.

The special meeting of Vista Outdoor stockholders, which will, among other things, vote on a proposal to adopt the merger agreement with CSG, is scheduled to be held virtually on July 23, 2024, at 9:00 a.m. CST.

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

The Board issued a letter to MNC reproduced in full below.


July 8, 2024

MNC Capital
Attention: Mark Gottfredson

Mr. Gottfredson:

I am writing on behalf of Vista Outdoor Inc. (“Vista”) in response to MNC Capital’s (“MNC”) letter dated June 26, 2024, expressing MNC’s interest in pursuing a transaction pursuant to which MNC would acquire Vista in an all-cash transaction for $42.00 per Vista share (the “MNC Final Indication”). We also refer to the agreement and plan of merger dated as of October 15, 2023, as amended on May 27, 2024, June 23, 2024 and July 7, 2024, between Vista, Revelyst, Inc., CSG Elevate II Inc., CSG Elevate III Inc., and, solely for the purposes of the Guarantor Provisions as defined therein, Czechoslovak Group a.s. (the “CSG Merger Agreement”).

Vista’s Board of Directors (the “Board”) has carefully reviewed the MNC Final Indication in consultation with our financial advisors and outside legal counsel.

After a thorough evaluation of the merits and risks of the MNC Final Indication, the Board has determined that the MNC Final Indication would not be more favorable to Vista stockholders from a financial point of view than and would not reasonably be expected to be superior to, the transactions contemplated by the CSG Merger Agreement. The Board has, therefore, rejected the MNC Final Indication.

The Board takes its fiduciary responsibilities seriously and is deeply committed to maximizing value for all of our stockholders. The Board is always receptive to opportunities that will help us achieve that goal.

Michael Callahan
Chairman of the Board of Directors of Vista Outdoor Inc.