Fox Racing Complements Vista Outdoor's
Existing Brand Portfolio, Expands Leadership Positions in Helmets,
Protective Gear and Apparel for Motocross and Mountain
Biking
Acquisition Bolsters Outdoor Products Segment,
Adds Approximately $350 Million in
Revenue
ANOKA,
Minn., July 6, 2022 /PRNewswire/ -- Vista Outdoor
Inc. ("Vista Outdoor") (NYSE: VSTO), the parent company of 39
renowned brands that design, manufacture and market sporting and
outdoor products to consumers around the globe, today announced
that it has entered into a definitive agreement to acquire
Irvine, Calif.-based Fox Racing, a
global icon in performance motocross, mountain bike and lifestyle
gear for adventure seekers. The purchase price is $540 million, with the potential for an
additional $50 million earnout based
on Fox Racing's financial performance.
For 50 years, Fox Racing has been a leading voice in the
motocross and adventure community, with a dedicated consumer
following and talented group of employees that embody the brand's
mission to "honor yesterday, conquer today, and invent tomorrow."
Fox Racing's deep history of producing innovative gear that enables
racers and explorers to reach new heights aligns perfectly with
Vista Outdoor's existing portfolio of leading outdoor brands. Fox
Racing grew net sales by a compound annual growth rate of
approximately 20% from calendar year 2019 to 2021 and is expected
to grow in excess of that in calendar year 2022.
"Over the last four years, we have built a diversified portfolio
of iconic outdoor brands led by a proven leadership team that
continues to execute well and drive strong results for our
shareholders," said Chris Metz,
Vista Outdoor CEO. "With the acquisition of Fox Racing, we are
continuing the successful implementation of our strategy to use
accretive acquisitions to expand our leadership position and
ability to capitalize on long-term growth opportunities in outdoor
recreation. The Fox Racing acquisition meets all of our financial
and strategic acquisition criteria, even before taking into account
potential benefits from combining Fox Racing with our existing
business. I am pleased that we have been able to continue to add
category-leading brands like Fox Racing to our portfolio while
maintaining a strong balance sheet and reinvesting in our existing
business to drive organic growth.
"Fox Racing is an ideal fit for our portfolio with a reputation
for high quality helmets, protective gear and apparel for motocross
and mountain biking. Motocross and mountain biking are growing and
familiar categories for Vista Outdoor. Fox Racing is synergistic to
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. We expect that Fox Racing and
our legacy teams will find multiple opportunities to leverage core
competencies, enhance supply chain efficiency and resiliency, and
better serve our customers and consumers to drive future growth. We
believe that the combined platform will make each business stronger
and more profitable tomorrow than they are today, while allowing us
to continue to deliver long-term returns for shareholders.
Following our separation, which was previously announced on
May 5th, we expect to be
one of the largest outdoor recreation companies in the industry,"
concluded Metz.
Jeffrey McGuane, CEO of Fox
Racing, will continue to lead the company following the closing of
the acquisition, as will all of Fox Racing's leadership team.
"We're excited to join the Vista Outdoor family," McGuane said.
"Together we can leverage the heritage of our leading brands, enjoy
new supply chain synergies, expand our deep and established
channels and target an expanded customer base. Combined with
enhanced access to capital for innovation and scale, we believe
this transaction is a win-win for all involved. Vista Outdoor's
leadership team has proven they have an effective, repeatable
acquisition model, making Vista Outdoor the clear acquirer of
choice for Fox Racing. It is not often that an acquired company can
remain true to its culture and customer base, while also tapping
into the benefits of Vista Outdoor's Centers of Excellence, vast
retail partnerships, innovation engines and a leadership team that
enables a founder's mentality and results-driven culture. Needless
to say, we are thrilled about this next chapter for Fox
Racing."
Fox Racing will be part of Vista Outdoor's Outdoor Products
segment and will be included in the new Outdoor Products Company
upon the completion of the previously announced separation.
Details on the Proposed
Transaction
Vista Outdoor has agreed to pay a gross purchase price of
$540 million, subject to certain
customary closing adjustments and not including contingent
incentives of up to $50 million, upon
the achievement of certain EBITDA targets. For 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 expects to finance this acquisition through a
combination of a $600 million
asset-based revolving credit facility, which will replace Vista
Outdoor's existing asset-based revolving credit facility, and a
$350 million secured term loan
facility. Vista Outdoor expects to close the transaction in the
second fiscal quarter of FY 2023, subject to the receipt of
regulatory approvals and other customary closing conditions.
Following the closing of this transaction, Vista Outdoor's
leverage ratio is expected to be below 1.5 times, well within the
target leverage ratio of one to two times.
Vista Outdoor will provide updated fiscal 2023 guidance when it
reports first quarter fiscal 2023 earnings on July 28, 2022, which is in line with historical
cadence.
Robert W. Baird & Co. served as financial advisor and Ropes
& Gray LLP served as legal advisor to Fox Racing.
Morgan Stanley & Co. LLC served as financial advisor and
Reed Smith LLP served as legal advisor to Vista Outdoor in
connection with the transaction. JPMorgan Chase Bank, N.A. is also
providing financing advice to Vista Outdoor and together with
Capital One, N.A. are serving as joint lead arrangers and
bookrunners and Cravath, Swaine & Moore LLP served as legal
advisor to Vista Outdoor in connection with the financing for the
transaction.
Additional Materials
For additional information about Fox Racing and the definitive
agreement, please view the Fox Racing Acquisition Presentation by
clicking here, and the Fox Racing Acquisition Infographic by
clicking here.
Vista Outdoor plans to report its first quarter fiscal year 2023
financial results on Thursday, July 28,
2022, at 5:00 a.m. EDT. In
addition to the results, which will be published on Vista Outdoor's
website, the company expects to discuss its outlook and financial
guidance and may discuss matters of strategy during the earnings
conference call which will be held at 9:00
a.m. EDT.
Please refer to our press release titled 'Vista Outdoor to
Release First Quarter Fiscal 2023 Financial Results' for the
earnings webcast and replay information.
About Fox Racing
Since 1974, when Geoff Fox first
introduced the world to our iconic logo, Fox Racing has been all
about family. Not just in name—a legacy that continues to this
day—but the idea of celebrating and sharing the passion of life on
two wheels with the world. This is what drives us, inspires us, and
keeps us close. Because "skulk" is more than just a word for a
family of foxes—it's the adventure, the fidelity of friends, and
everything that happens along the way.
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. We serve a broad and diverse range
of consumers around the globe, including outdoor enthusiasts,
golfers, cyclists, backyard grillers, campers, hunters,
recreational shooters, athletes, as well as law enforcement and
military professionals. Our reporting segments, Outdoor Products
and Sporting Products, provide these consumers with a wide range of
performance-driven, high-quality and innovative outdoor and
sporting products. Our operating model leverages shared resources
across brands to achieve levels of excellence and performance that
would be out of reach for any one brand on its own. Brands include
Remington Ammunition, Bushnell, CamelBak, Bushnell Golf, Foresight
Sports, Fiber Energy Products, Bell Helmets, Camp Chef, Giro,
QuietKat, Stone Glacier, Federal Ammunition and more. Vista Outdoor
products are sold at leading retailers and distributors across
North America and worldwide. For
news and information, visit our website at
www.vistaoutdoor.com.
Forward-Looking Statements
Certain statements in this press release and other oral and
written statements made by Vista Outdoor from time to time are
forward-looking statements, including those that discuss, among
other things: Vista Outdoor's 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 Vista Outdoor's actual results to differ
materially from expectations described in such forward-looking
statements, including the following: impacts from the COVID-19
pandemic on Vista Outdoor's operations, the operations of our
customers and suppliers and general economic conditions; general
economic and business conditions in the
United States and Vista Outdoor's other markets outside
the United States, including
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; Vista Outdoor's ability to attract and
retain key personnel and maintain and grow its relationships with
customers, suppliers and other business partners, including Vista
Outdoor's ability to obtain acceptable third party licenses; Vista
Outdoor's ability to adapt its 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; Vista Outdoor's ability to
maintain and enhance brand recognition and reputation; others' use
of social media to disseminate negative commentary about us and
boycotts; reductions in or unexpected changes in or our inability
to accurately forecast demand for ammunition, accessories or other
outdoor sports and recreation products; risks associated with Vista
Outdoor's sales to significant retail customers, including
unexpected cancellations, delays and other changes to purchase
orders; supplier capacity constraints, production disruptions or
quality or price issues affecting Vista Outdoor's operating costs;
Vista Outdoor's competitive environment; risks associated with
diversification into new international and commercial markets
including regulatory compliance; changes in the current tariff
structures; the supply, availability and costs of raw materials and
components; increases in commodity, energy and production costs;
changes in laws, rules and regulations relating to Vista Outdoor's
business, such as federal and state ammunition regulations; Vista
Outdoor's ability to realize expected benefits from acquisitions
and integrate acquired businesses; Vista Outdoor's ability to
execute our strategic transformation plan, including our ability to
realize expected benefits from the successful divestiture of
non-core brands and profitability improvement initiatives; Vista
Outdoor's ability to take advantage of growth opportunities in
international and commercial markets; foreign currency exchange
rates and fluctuations in those rates; 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;
risks associated with cybersecurity and other industrial and
physical security threats; capital market volatility and the
availability of financing; changes to accounting standards or
policies; and changes in tax rules or pronouncements. You are
cautioned not to place undue reliance on any forward-looking
statements we make. Vista Outdoor undertakes no obligation to
update any forward-looking statements except as otherwise required
by law. For further information on factors that could impact Vista
Outdoor, and statements contained herein, please refer to Vista
Outdoor's filings with the Securities and Exchange Commission.
Media
Contact:
|
Investor
Contact:
|
Eric
Smith
|
Shelly
Hubbard
|
Phone:
901-573-9156
|
Phone:
612-518-5406
|
E-mail:
media.relations@vistaoutdoor.com
|
E-mail:
investor.relations@vistaoutdoor.com
|
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SOURCE Vista Outdoor Inc.