Vista Outdoor, Inc. confirmed that it entered into an amendment to its merger agreement with Czechoslovak Group a.s. (CSG) to acquire Vista’s Kinetic Group ammunition businesses, formerly the Sporting Products segment.

The amended agreement, among other things, increases the base purchase price payable by CSG for the acquisition of The Kinetic Group business by $50 million from $1.91 billion to $1.96 billion and increases the cash consideration payable to Vista Outdoor stockholders by $3.10 per share of Vista Outdoor Common Stock from $12.90 to $16.00 in cash, a 24 percent increase.

Based on the amended merger agreement with CSG, Vista Outdoor stockholders will receive at the closing of the transaction one share of common stock of Revelyst and $16.00 in cash, in each case, per share of Vista Outdoor common stock.

After the company’s separation, Revelyst will be the new company name for the remaining Vista Outdoor business, which operates as the Vista Outdoor Products segment.

In light of the excess cash generated by Vista Outdoor in its fourth quarter, Vista Outdoor determined that it will return approximately $130 million of excess cash to its stockholders as a part of the cash consideration in the transaction, in addition to the $50 million increase in the base purchase price by CSG that it will also deliver to Vista Outdoor stockholders. Following the transaction’s closing, Revelyst still intends to distribute any on-hand cash exceeding $250 million to Revelyst stockholders as a share buyback or special dividend.

The transaction is expected to close in calendar year 2024 subject to approval of Vista Outdoor stockholders, receipt of clearance by the Committee on Foreign Investment in the United States (CFIUS) and other customary closing conditions. Vista Outdoor has been actively engaged with CFIUS, and its team is working with CFIUS to obtain clearance. Vista reported that it remains confident in its ability to receive CFIUS clearance for the transaction and that all other closing conditions will be satisfied.

Another Rejection for MNC Interest for Full Company
In related news, Vista Outdoor also announced that its Board of Directors, following consultation with its financial and legal advisors, had rejected the unsolicited indication of interest received from MNC Capital (MNC) on March 25, 2024, under which MNC expressed interest in acquiring Vista Outdoor in an all-cash transaction for $37.50 per Vista Outdoor share.

The Board issued a letter to MNC, the full text of which can found below.

Michael Callahan, chairman of the Board of Vista Outdoor, Inc., said, “After careful review with our financial and legal advisors and deliberation, the Board determined that the transaction contemplated by MNC’s indication of interest significantly undervalues the company. Despite engaging with representatives of MNC over the past month, including by providing substantial non-public information under a non-disclosure agreement, we have not received an improved economic proposal or committed financing. We take our fiduciary responsibilities seriously and do not believe that the transaction contemplated by MNC’s indication of interest is in the best interest of our stockholders.”

A company release on May 28 said the Board believes there is significantly more value in the Revelyst business than MNC credited in its indication of interest. The company’s long-term target to achieve mid-teens adjusted EBITDA margin and its Gear Up initiative is expected to re-accelerate growth through increased investment in innovation and its winning brands. The company expects to drive a $100 million improvement in adjusted EBITDA by fiscal year 2027.

The Board also believes Vista Outdoor is well on its way to delivering on its Gear Up initiative and expects to deliver $25 million to $30 million in savings while doubling standalone adjusted EBITDA in fiscal 2025. Additionally, the Board said the company’s strong cash generation and pay down of total debt by $115 million in Q4 of FY24 reinforces that the MNC indication of interest undervalues the Revelyst business.

Callahan continued, “We firmly believe that our pending transaction with CSG, which now includes an increased purchase price, and the separation of Revelyst as a standalone public company is the best path to drive greater value for our stockholders.”

The Board continues to recommend the acquisition of The Kinetic Group by Czechoslovak Group a.s.

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May 28, 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”) letters dated March 25, 2024, March 29, 2024, April 7, 2024 and May 17, 2024, expressing MNC’s interest in pursuing a transaction pursuant to which MNC would acquire Vista in an all-cash transaction for $37.50 per Vista share (the “MNC Revised Indication”). We also refer to the agreement and plan of merger dated as of October 15, 2023, 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 Revised Indication in consultation with our financial advisors and outside legal counsel.

After a thorough evaluation of the merits and risks of the MNC Revised Indication, the Board has determined that the MNC Revised 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 Revised Indication.

This determination by the Board was based on a number of factors, including that the consideration of $37.50 in cash per Vista Outdoor share in the MNC Revised Indication significantly undervalues Vista and does not take into account the significant stockholder value that is expected to be created by the separation of Revelyst and The Kinetic Group into two independent companies. This is further reinforced by the fact that Vista Outdoor decreased its total debt by $115 million in Q4 of FY24, that the Revelyst business is expected to double standalone adjusted EBITDA in FY25 and achieve mid-teens EBITDA margin in the long term and that Vista Outdoor is well on its way to delivering on the GEAR Up initiative and is expecting to deliver $25-30 million in savings in FY25.

In light of the lack of compelling value in the MNC Revised Indication and the fact that MNC has not delivered an improved economic proposal, we continue to believe that our pending transaction with CSG will drive significantly greater value for our stockholders.

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.

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

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