Vista Outdoor Pays Hefty Multiple to Enter SUP Market

In a move that illustrates a determination to diversify beyond shooting sports, Vista Outdoor Inc. paid a rich multiple last week to acquire Jimmy Styks LLC, the exclusive stand up paddle board (SUP) supplier for Costco Wholesale Corp. and West Marine Inc.

Utah-based Vista Outdoor said it paid approximately $40 million in an all cash deal to acquire privately owned Jimmy Styks, which offers nearly 30 SKUs in epoxy, inflatable, soft and thermoform boards, as well as accessories. The company will be integrated into the Outdoor Products segment of Vista Outdoor, which includes the Bushnell, Bollé, Cébé and Tasco optics brands, in addition to about 20 firearms and archery accessories brands.

Kyle Reeves and Jeremy Wilkens, who founded Jimmy Styks in 2009 in Huntington Beach, CA, will remain with Vista Outdoor.

The purchase price is approximately 5.5 times Jimmy Styk's expected calendar year 2015 EBITDA and could increase if the company hits profit targets over the next three years. Vista Outdoor expects the acquisition to be accretive to FY16 earnings per share (EPS), including impacts associated with transaction expenses.

The deal marks the third acquisition closed in the rapidly growing and fractured North American SUP industry this year.
 
The completed transaction provides Vista Outdoor with access to the water sports market through the fast-growing SUP board segment, which experienced 35 percent growth in 2013 and 40 percent growth in 2014, according to VSTO Chairman and CEO Mark DeYoung.

“Jimmy Styks expands our portfolio into water sports with products that support activities many of our consumers enjoy, such as fishing, camping and spending their recreational time outdoors,” said DeYoung.

VSTO earned about 65 percent of its sales from its Shooting Segment in the fiscal year ended March 31, but has pegged much of its growth to its Outdoor Products segment, where sales are still tied closely to shooting sports. A decline in gun sales contributed to a 14 percent drop at the Outdoor Products segment in the fourth quarter.