Exclusive-Vista Outdoor strikes deal to sell itself in two parts for $3.4 billion By Reuters

Written by Anirban Sen and Abigail Somerville

NEW YORK (Reuters) – Vista Outdoor (NYSE:) agreed on Friday to sell itself in parts to separate buyers for a total of $3.35 billion, including debt, after fending off a hostile rival that has pursued the sporting goods and ammunition maker for months. .

Vista has struck a deal to sell its sporting goods unit Revelyst to investment firm Strategy Value Partners for $1.1 billion, according to a statement seen by Reuters.

It has also agreed to review the terms of a previously agreed deal for the sale of its munitions business Kinetic to Prague-based defense contractor Czechoslovak Group (CSG).

CSG has raised its bid for Kinetic by $75 million to $2.2 billion. The company, which initially also agreed to buy a 7.5% stake in Revelyst for $150 million, will no longer do so.

Together, the two deals value Vista at $45 per share, beating a competing bid of $43 per share from MNC Capital, an investment firm led by former Vista board member Mark Gottfredson. The MNC has repeatedly tried to acquire Vista this year.

“The Board of Directors has worked tirelessly to deliver maximum value for its shareholders, and we are pleased to reach this agreement with the Senior Vice President and CSG that helps us achieve this goal,” Michael Callahan, Vista Chairman, said in the statement.

The transaction was approved by Vista’s Board of Directors. The Revelyst sale is expected to close by January, subject to regulatory approvals and the completion of the CSG transaction.

The complex deal must go to Vista shareholders for a vote.

The company’s previous deal with CSG received mixed recommendations from proxy advisory firms. Glass Lewis recommended that Vista shareholders vote in favor of the proposed merger of the ammunition unit with CSG, while Institutional Shareholder Services recommended voting against the deal.

Minnesota-based Vista is the parent company of the Federal Ammunition and Remington Ammunition brands, while outdoor product brands include Foresight Sports, CamelBak, Bushnell Golf and Simms Fishing.

The months-long saga between Vista and the MNC is taking place against the backdrop of rising demand for military supplies since the conflict between Russia and Ukraine escalated in 2022.

“With this investment, we plan to put the full operating resources of SVP and the network behind Revelyst to help accelerate the success of this market leader,” said David Ginberg, head of the SVP’s North America corporate investment team.

Back and forth

A bidding war for Vista began earlier this year, with Vista rejecting multiple offers from MNC and backing CSG’s bid for Kinetic. In June, the CSG deal was approved by the Committee on Foreign Investment in the United States, which reviews foreign investments for potential national security concerns. The MNC, based in Colleyville, Texas, argued that the deal with CSG would pose a threat to national security.

In July, Vista launched a strategic review to explore all its options, after failing to garner investor support for the CSG deal. The company has had to postpone a shareholder vote to approve the deal with CSG several times in recent months in its attempts to fight repeated MNC overtures.

In September, the MNC submitted a revised offer worth $3.2 billion, including debt, and said it would partner with an unnamed private equity firm that would own Revelyst’s business to help fund its bid. Vista later teamed up separately with a private equity firm, which sources said was Strategic Value Partners, on a deal for its sporting goods business.

Shares of Vista Outdoor, which have risen about 35% since the beginning of the year, closed at $39.84 on Friday, giving the company a market value of about $2.33 billion.

SVP, launched by investor Victor Khosla in 2001, has about $19 billion in assets under management.

Morgan Stanley advised Vista on the transaction, while Moelis (NYSE:) advised the company’s board of directors. Goldman Sachs advised the Senior Vice President, while JPMorgan advised CSG.