Vista Outdoor board recommends CSG transaction, rejects MNC Capital proposal

Vista Outdoor announced that its board of directors unanimously recommends stockholders vote for the transaction with Czechoslovak Group, or CSG, to acquire The Kinetic Group and invest in Revelyst, and unanimously rejects the last proposal from MNC Capital. Over the past six weeks as part of its subsequent review of strategic alternatives, Vista Outdoor engaged in discussions with multiple interested parties, including extensively negotiating with both MNC and CSG. Ultimately, CSG agreed to acquire The Kinetic Group for $2.15B, which is approximately $250M higher than the implied valuation of MNC’s last proposal and agreed to purchase shares representing 7.5% of standalone Revelyst for $150M, valuing Revelyst at $2B. At the closing of the CSG transaction, Vista Outdoor stockholders will receive $28 in cash per share and one share of Revelyst common stock for each share of Vista Outdoor common stock. On September 15, the Private Equity Firm partnered with MNC reached out to Vista Outdoor. The company has subsequently been in active dialogue with the Private Equity Firm regarding a potential acquisition of Revelyst, separate from MNC. While no agreement has been reached, the board will continue its discussions with the Private Equity Firm. An agreement could be reached in conjunction with or independent of the CSG transaction. The board said it is confident that the CSG transaction enables stockholders to retain the ability to realize a potential change of control premium for Revelyst, is the optimal path to deliver the highest value to Vista Outdoor stockholders. The CSG transaction, which can be terminated after October 15, delivers cash consideration to stockholders. At the closing of the CSG transaction, Vista Outdoor stockholders will receive $28 in cash per share and one share of Revelyst common stock for each share of Vista Outdoor common stock, providing stockholders the opportunity to participate in the upside potential of Revelyst. Following the closing of the CSG transaction, Revelyst also plans to establish an initial $50M share repurchase program. Vista Outdoor and CSG have received all regulatory approvals required under the merger agreement and are prepared to close the CSG transaction in October, subject to receipt of stockholder approval and satisfaction of other customary closing conditions. After this engagement with MNC, Vista Outdoor received a revised proposal from MNC to acquire the Company for $43 in cash per share. Following consultation with its financial and legal advisors, the board has unanimously rejected this last MNC proposal and determined that it would not be more favorable to Vista Outdoor stockholders from a financial point of view than the CSG transaction. Revelyst expects to double adjusted EBITDA sequentially for the quarter and for the full year, with a path to $100M in run-rate cost savings by fiscal year 2027 and mid-teens EBITDA margin long-term. Revelyst is also gaining market share in its key categories through new product and partnership launches. Vista Outdoor urges stockholders to vote for the CSG transaction at the fast-approaching special meeting of stockholders on September 27 to lock in the value of the CSG transaction.