CSG Agrees to Purchase 7.5% of Standalone
Revelyst for $150 Million, Valuing Revelyst at $2.0 Billion
Revelyst Plans to Establish Share Repurchase
Program Following Closing of CSG Transaction
Continues to Engage with MNC and Urges MNC to
Provide a Best and Final Proposal
Gates Capital Is a Conflicted Party – Vista
Outdoor’s Second Largest Stockholder Revealed as an Investor in
MNC’s Proposal
Vista Outdoor Inc.’s (“Vista Outdoor”, the “Company”) (NYSE:
VSTO) Board of Directors today issued the following statement:
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(Graphic: Vista Outdoor Inc.)
We take seriously our duty to maximize
value for stockholders. In our continued efforts to maximize
stockholder value and in response to stockholder feedback, we have
been conducting a thorough process with financial and legal
advisors to evaluate all strategic alternatives for our businesses.
We are pleased to report that the Board’s process has yielded
significant value for our stockholders.
After extensive diligence, CSG has agreed
to make a significant investment in Revelyst which delivers
increased cash consideration to stockholders. On September 12,
the Company entered into an amendment to the merger agreement with
Czechoslovak Group a.s. (“CSG”) in which CSG has agreed to purchase
shares representing 7.5% of standalone Revelyst for $150 million
(the “Revised CSG Transaction”) at a price of ~$31 per Revelyst
share, valuing Revelyst at $2.0 billion.
Vista Outdoor notes that the Company’s GEAR
Up transformation program is delivering value in line with prior
guidance. Revelyst continues to gain market share in key categories
and is on track to double Adjusted EBITDA sequentially for the
quarter and for the full year.
The $150 million of cash payable by CSG for
the purchase of Revelyst shares plus additional cash from Vista
Outdoor’s balance sheet will be returned to Vista Outdoor
stockholders, increasing the cash consideration payable in the
Revised CSG Transaction by $4 per share to $28 per share. At the
closing of the Revised 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.
Following the closing of the CSG Transaction,
Revelyst plans to establish an initial $50 million share repurchase
program.
The MNC Revised Proposal significantly
undervalues The Kinetic Group and Revelyst compared to the
Revised CSG Transaction. On September 6, we received a
revised proposal from MNC to acquire the Company for $43 in cash
per share (the “MNC Revised Proposal”). Documentation delivered to
the Board in connection with the MNC Revised Proposal implies a
value of ~$1.9 billion for The Kinetic Group and ~$1.2 billion for
Revelyst. In comparison, the Revised CSG Transaction represents a
value of $2.15 billion for The Kinetic Group and an investment in
Revelyst at a value of $2.0 billion.
We have engaged extensively with MNC,
accommodated MNC’s diligence requests, and provided access to
management. MNC has publicly confirmed that it completed its
diligence. The Company notes that the MNC Revised Proposal does
not represent an increase in enterprise value compared to MNC’s
prior proposal when considering Vista Outdoor’s cash generated and
lower net debt; however, we will continue to constructively
engage with MNC and urge MNC to deliver its best and final proposal
as soon as possible.
Gates Capital is a conflicted party.
The Board recently learned that the Company’s second largest
stockholder, Gates Capital Management Inc. (“Gates Capital”), is
included in MNC’s equity consortium. Given its involvement with
MNC, Gates Capital’s public expression in favor of MNC’s proposal
reflects a bias and conflict of interest. Consequently, Gates
Capital’s interests are not aligned with those of other Vista
Outdoor stockholders. We urge stockholders to make their own
informed decision based on the valuation differential between the
Revised CSG Transaction and the MNC Revised Proposal.
The Board is, and has always been,
committed to maximizing value for all Vista Outdoor stockholders
and remains open to opportunities that achieve this goal. The
Board continues to recommend Vista Outdoor stockholders vote in
favor of the proposal to adopt the merger agreement with CSG at the
special meeting of stockholders (the “Special Meeting”), which will
be held at 9:00 am (Central Time) on September 27, 2024.
Morgan Stanley & Co. LLC is acting as sole financial adviser
to Vista Outdoor and Cravath, Swaine & Moore LLP is acting as
legal adviser to Vista Outdoor. Moelis & Company LLC is acting
as sole financial adviser to the independent directors of Vista
Outdoor and Gibson, Dunn & Crutcher LLP is acting as legal
adviser to the independent directors of Vista Outdoor.
About Vista Outdoor Inc.
Vista Outdoor (NYSE: VSTO) is the parent company of more than
three dozen renowned brands that design, manufacture and market
sporting and outdoor products. Brands include Bushnell, CamelBak,
Bushnell Golf, Foresight Sports, Fox Racing, Bell Helmets, Camp
Chef, Giro, Simms Fishing, QuietKat, Stone Glacier, Federal
Ammunition, Remington Ammunition and more. Our reporting segments,
Outdoor Products and Sporting Products, provide consumers with a
wide range of performance-driven, high-quality and innovative
outdoor and sporting products. For news and information, visit our
website at www.vistaoutdoor.com.
Forward-Looking Statements
Some of the statements made and information contained in this
press release, excluding historical information, are
“forward-looking statements,” including those that discuss, among
other things: Vista Outdoor Inc.’s (“Vista Outdoor”, “we”, “us” or
“our”) plans, objectives, expectations, intentions, strategies,
goals, outlook or other non-historical matters; projections with
respect to future revenues, income, earnings per share or other
financial measures for Vista Outdoor; and the assumptions that
underlie these matters. The words “believe,” “expect,”
“anticipate,” “intend,” “aim,” “should” and similar expressions are
intended to identify such forward-looking statements. To the extent
that any such information is forward-looking, it is intended to fit
within the safe harbor for forward-looking information provided by
the Private Securities Litigation Reform Act of 1995.
Numerous risks, uncertainties and other factors could cause our
actual results to differ materially from the expectations described
in such forward-looking statements, including the following: risks
related to the previously announced transaction among Vista
Outdoor, Revelyst, Inc. (“Revelyst”), CSG Elevate II Inc., CSG
Elevate III Inc. and CZECHOSLOVAK GROUP a.s. (the “Transaction”),
including (i) the failure to receive, on a timely basis or
otherwise, the required approval of the Transaction by our
stockholders, (ii) the possibility that any or all of the various
conditions to the consummation of the Transaction may not be
satisfied or waived, including the failure to receive any required
regulatory approvals from any applicable governmental entities (or
any conditions, limitations or restrictions placed on such
approvals), (iii) the possibility that competing offers or
acquisition proposals may be made, (iv) the occurrence of any
event, change or other circumstance that could give rise to the
termination of the merger agreement relating to the Transaction,
including in circumstances which would require Vista Outdoor to pay
a termination fee, (v) the effect of the announcement or pendency
of the Transaction on our ability to attract, motivate or retain
key executives and employees, our ability to maintain relationships
with our customers, vendors, service providers and others with whom
we do business, or our operating results and business generally,
(vi) risks related to the Transaction diverting management’s
attention from our ongoing business operations and (vii) that the
Transaction may not achieve some or all of any anticipated benefits
with respect to either business segment and that the Transaction
may not be completed in accordance with our expected plans or
anticipated timelines, or at all; risks related to the review of
strategic alternatives announced on July 30, 2024 (“Review”),
including (i) the terms, structure, benefits and costs of any
transaction that may result from the Review, (ii) the timing of any
such transaction that may result from the Review and whether any
such transaction will be consummated at all, (iii) the effect of
the announcement of the Review on our ability to attract, motivate
or retain key executives and employees, our ability to maintain
relationships with our customers, vendors, service providers and
others with whom we do business, or our operating results and
business generally, (iv) risks related to the Review diverting
management’s attention from our ongoing business operations, (v)
the costs or expenses resulting from the Review, (vi) any
litigation relating to the Review and (vii) the Review may not
achieve some or all of any anticipated benefits of the Review;
impacts from the COVID-19 pandemic on our operations, the
operations of our customers and suppliers and general economic
conditions; supplier capacity constraints, production or shipping
disruptions or quality or price issues affecting our operating
costs; the supply, availability and costs of raw materials and
components; increases in commodity, energy, and production costs;
seasonality and weather conditions; our ability to complete
acquisitions, realize expected benefits from acquisitions and
integrate acquired businesses; reductions in or unexpected changes
in or our inability to accurately forecast demand for ammunition,
accessories, or other outdoor sports and recreation products;
disruption in the service or significant increase in the cost of
our primary delivery and shipping services for our products and
components or a significant disruption at shipping ports; risks
associated with diversification into new international and
commercial markets, including regulatory compliance; our ability to
take advantage of growth opportunities in international and
commercial markets; our ability to obtain and maintain licenses to
third-party technology; our ability to attract and retain key
personnel; disruptions caused by catastrophic events; risks
associated with our sales to significant retail customers,
including unexpected cancellations, delays, and other changes to
purchase orders; our competitive environment; our ability to adapt
our products to changes in technology, the marketplace and customer
preferences, including our ability to respond to shifting
preferences of the end consumer from brick and mortar retail to
online retail; our ability to maintain and enhance brand
recognition and reputation; our association with the firearms
industry; others’ use of social media to disseminate negative
commentary about us, our products, and boycotts; the outcome of
contingencies, including with respect to litigation and other
proceedings relating to intellectual property, product liability,
warranty liability, personal injury, and environmental remediation;
our ability to comply with extensive federal, state and
international laws, rules and regulations; changes in laws, rules
and regulations relating to our business, such as federal and state
ammunition regulations; risks associated with cybersecurity and
other industrial and physical security threats; interest rate risk;
changes in the current tariff structures; changes in tax rules or
pronouncements; capital market volatility and the availability of
financing; foreign currency exchange rates and fluctuations in
those rates; general economic and business conditions in the United
States and our markets outside the United States, including as a
result of the war in Ukraine and the imposition of sanctions on
Russia, the conflict in the Gaza strip, the COVID-19 pandemic or
another pandemic, conditions affecting employment levels, consumer
confidence and spending, conditions in the retail environment, and
other economic conditions affecting demand for our products and the
financial health of our customers.
You are cautioned not to place undue reliance on any
forward-looking statements we make, which are based only on
information currently available to us and speak only as of the date
hereof. A more detailed description of risk factors that may affect
our operating results can be found in Part 1, Item 1A, Risk
Factors, of our Annual Report on Form 10-K for fiscal year 2024,
and in the filings we make with the SEC from time to time. We
undertake no obligation to update any forward-looking statements,
except as otherwise required by law.
No Offer or Solicitation
This communication is neither an offer to sell, nor a
solicitation of an offer to buy any securities, the solicitation of
any vote, consent or approval in any jurisdiction pursuant to or in
connection with the Transaction or otherwise, nor shall there be
any sale, issuance or transfer of securities in any jurisdiction in
contravention of applicable law. No offer of securities shall be
made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act of 1933, as amended, and otherwise
in accordance with applicable law.
Additional Information and Where to Find It
These materials may be deemed to be solicitation material in
respect of the Transaction. In connection with the Transaction,
Revelyst, a subsidiary of Vista Outdoor, filed with the SEC a
registration statement on Form S-4 in connection with the proposed
issuance of shares of common stock of Revelyst to Vista Outdoor
stockholders pursuant to the Transaction, which Form S-4 includes a
proxy statement of Vista Outdoor that also constitutes a prospectus
of Revelyst (the “proxy statement/prospectus”). INVESTORS AND
STOCKHOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH
THE SEC, INCLUDING OUR PROXY STATEMENT/PROSPECTUS, BECAUSE THEY
CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND THE PARTIES
TO THE TRANSACTION. The registration statement was declared
effective by the SEC on March 22, 2024, and we have mailed the
definitive proxy statement/prospectus to each of our stockholders
entitled to vote at the meeting relating to the approval of the
Transaction. Investors and stockholders may obtain the proxy
statement/prospectus and any other documents free of charge through
the SEC’s website at www.sec.gov. Copies of the documents filed
with the SEC by Vista Outdoor are available free of charge on our
website at www.vistaoutdoor.com.
Participants in Solicitation
Vista Outdoor, Revelyst, CSG Elevate II Inc., CSG Elevate III
Inc. and CZECHOSLOVAK GROUP a.s. and their respective directors,
executive officers and certain other members of management and
employees, under SEC rules, may be deemed to be “participants” in
the solicitation of proxies from our stockholders in respect of the
Transaction. Information about our directors and executive officers
is set forth in our proxy statement on Schedule 14A for our 2024
Annual Meeting of Stockholders, which was filed with the SEC on
July 24, 2024, and subsequent statements of changes in beneficial
ownership on file with the SEC. These documents are available free
of charge through the SEC’s website at www.sec.gov. Additional
information regarding the interests of potential participants in
the solicitation of proxies in connection with the Transaction,
which may, in some cases, be different than those of our
stockholders generally, is also included in the proxy
statement/prospectus relating to the Transaction.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240912742992/en/
Investor Contact: Tyler Lindwall Phone: 612-704-0147
Email: investor.relations@vistaoutdoor.com
Media Contact: Eric Smith Phone: 720-772-0877 Email:
media.relations@vistaoutdoor.com
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