Vista Outdoor, Inc. announced it closed on the acquisition of Irvine, CA-based Fox Racing for the purchase price of $540 million, with the potential for an additional $50 million earnout based on Fox Racing’s financial performance.
The addition of Fox Racing, the performance motocross, mountain bike and lifestyle gear manufacturer, adds another category to Vista’s portfolio.
“We are excited to welcome Fox Racing to the Vista Outdoor family,” said Chris Metz, CEO. “This legendary brand brings us into one of the most passionate sporting bases with motocross and expands our footprint in mountain biking. Fox Racing is synergistic with our existing action sports business unit, which includes Bell Helmets, Giro, Blackburn, Krash, Copilot, and Raskullz. The addition of Fox Racing to our portfolio will allow us to target multiple consumer demographics across mountain and road biking, skiing/snowboarding and powersports. With the Fox Racing acquisition now closed and the planned acquisition of Simms Fishing Products announced, we’re continuing the successful implementation of our strategy to use accretive acquisitions to expand leadership positions across categories while enhancing our ability to capitalize on long-term growth opportunities in outdoor recreation.”
Fox Racing grew net sales by a compound annual growth rate of approximately 20 percent from the calendar years 2019 to 2021 and is expected to grow roughly 20 percent in the calendar year 2022.
Jeffrey McGuane, CEO, Fox Racing, will continue leading the brand with current employees of Fox Racing’s leadership team.
Fox Racing is now part of Vista’s Outdoor Products segment and included in its Outdoor Products company upon completion of the previously announced separation.
Vista Outdoor paid a gross purchase price of $540 million, subject to certain customary closing adjustments and not including contingent incentives of up to $50 million, upon achieving specific EBITDA targets. For the calendar year 2022, Fox Racing’s full-year net sales and adjusted EBITDA are expected to be approximately $350 million and $55 million, respectively. Vista Outdoor expects the transaction to be immediately accretive to earnings, excluding transaction costs, transition costs, and inventory step-up.
Vista Outdoor financed the acquisition through a $600 million asset-based revolving credit facility, which replaces Vista Outdoor’s existing asset-based revolving credit facility, and a $350 million secured term loan facility. Vista Outdoor’s leverage ratio remains within the target leverage ratio of one to two times.
