Vista Outdoor on Friday agreed to be sold in parts to two separate buyers for a total of $3.35 billion, including debt, after fending off a hostile suitor that had been pursuing the sporting goods and ammunition maker for months.
Vista has struck a deal to sell its sportswear unit, Revelyst, to investment firm Strategic Value Partners for $1.1 billion, according to a statement seen by Reuters.
He also agreed to revise the terms of a previously agreed agreement to sell Kinetic’s munitions business to Prague-based defense contractor Chekoslovak Group (CSG).
CSG raised its bid for Kinetic by $75 million to $2.2 billion. The company, which had also initially agreed to buy a 7.5% stake in Revelyst for $150 million, will no longer do so.
Combined, the two deals value Vista at $45 per share, beating rival $43 per share offer from MNC Capitalan investment firm led by former Vista board member Mark Gottfredson. MNC has repeatedly tried to acquire Vista this year.
“The board has worked tirelessly to deliver maximum value to its shareholders, and we are pleased to have reached this agreement with SVP and CSG that helps us achieve that goal,” Michael Callahan, chairman, said in the statement. of Vista’s board of directors.
The transaction has been approved by Vista’s board of directors. The sale of Revelyst is expected to close by January, subject to regulatory approvals and completion of the CSG deal.
The complex transaction will have to 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 munitions unit with CSG, while the institutional equities service recommended that this deal be voted against.
Minnesota-based Vista is the parent of the Federal Ammunition and Remington Ammunition brands, while its outdoor product brands include Foresight Sports, CamelBak, Bushnell Golf and Simms Fishing.
The months-long saga with Vista and the MNC took place against the backdrop of growing demand for military supplies from the escalation of the Russia-Ukraine conflict in 2022.
“With this investment, we plan to put SVP’s full operational resources and network behind Revelyst to help accelerate the success of this market leader,” said David Geenberg, head of SVP’s corporate investment team in the North America.
The bidding war for Vista started earlier this year, with Vista rejecting multiple offers from MNC and supporting 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 investment for potential national security concerns. The Colleyville, Texas-based MNC had argued that a 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 been forced to postpone a shareholder vote to approve the deal with CSG several times in recent months as it tries to deal with the MNC’s repeated overtures.
In September, the MNC submitted a revised offer valued at $3.2 billion, including debt, and said it would partner with an unnamed private equity firm that would own the Revelyst business to help fund its bid. Vista later separately partnered with the private equity firm, which sources said was Strategic Value Partners, in a deal for the sportswear business.
Shares of Vista Outdoor, which have risen about 35% since the start of the year, closed at $39.84 on Friday, giving the company a market value of about $2.33 billion.
SVP, which was started by investor Victor Khosla in 2001, has approximately $19 billion in assets under management.
Morgan Stanley advised Vista on the deal, while Moelis advised the company’s board of directors. Goldman Sachs advised the SVP, while JPMorgan advised CSG.