Vista Outdoor board of directors urges stockholders to vote "FOR" value-maximizing CSG transaction
In a significant move toward enhancing shareholder value, Vista Outdoor Inc. (NYSE: VSTO) has issued a formal letter to its stockholders, calling for their support in an upcoming critical vote. The Board of Directors of Vista Outdoor has unanimously endorsed a transaction with the Czechoslovak Group a.s. (“CSG”), urging stockholders to vote in favor of this deal at the special meeting set for September 27, 2024. This transaction involves the acquisition of The Kinetic Group and an investment in Revelyst, which promises to deliver substantial value to shareholders.
A critical moment for Vista Outdoor
Vista Outdoor has undergone an exhaustive two-year evaluation process to identify opportunities that would best serve the interests of its stockholders. The result of this rigorous review is a carefully considered decision to proceed with the CSG Transaction. The company's Board of Directors is clear in its message to stockholders: the CSG Transaction represents the most promising path forward.
The CSG deal presents immediate and long-term benefits, including a compelling cash payout, future growth opportunities through Revelyst, and the chance for further financial gains, particularly if Revelyst experiences a change in control.
The CSG transaction at a glance
Under the terms of the amended agreement with CSG, Vista Outdoor will secure significant value for its stockholders:
- Cash consideration: Stockholders will receive $28 per share in cash.
- Revelyst shares: For every share of Vista Outdoor common stock, stockholders will receive one share of Revelyst common stock.
- Potential upside in Revelyst: Revelyst has substantial growth potential, with expectations to double its Adjusted EBITDA for the coming quarter and continuing to grow annually.
- Transaction completion: Subject to stockholder approval, the deal is expected to close in October 2024.
The strategic advantage over MNC Capital's proposal
The Vista Outdoor Board firmly asserts that the CSG Transaction is superior to alternative offers, most notably a recent proposal from MNC Capital. The MNC bid, according to the Board, undervalues Vista Outdoor by approximately $250 million compared to the offer from CSG. The clear message to stockholders is that the CSG deal maximizes the value of The Kinetic Group while allowing continued investment and growth through Revelyst.
Unlocking the value of Revelyst
A key aspect of the CSG Transaction is the value tied to Revelyst, a subsidiary with significant momentum. Revelyst’s market performance and projected growth have been impressive, and the Board of Directors sees strong potential for stockholders to benefit from this continued upward trajectory. Revelyst’s financial outlook is optimistic, with the company forecasting $100 million in cost savings by fiscal year 2027, a mid-teens EBITDA margin, and notable gains in market share through innovative products and partnerships.
Furthermore, the Board remains open to exploring strategic alternatives that may offer even greater value for stockholders. This includes potential discussions with private equity firms, ensuring that the best possible outcomes for stockholders are pursued.
The urgency of the vote
The Board's letter highlights a key deadline: after October 15, 2024, the merger agreement between Vista Outdoor and CSG can be terminated. Stockholders are urged to cast their votes before this deadline to lock in the benefits of the CSG Transaction. Failing to approve the deal could result in the loss of the transaction, a missed opportunity for immediate and long-term financial rewards.
Voting process and assistance
With time running short, the Vista Outdoor Board emphasizes the importance of prompt action. Stockholders can cast their votes via the internet or telephone by following the instructions provided in the proxy materials. For those needing assistance, the company’s proxy solicitor, Innisfree M&A Incorporated, is available to help.
Expert advisers supporting the transaction
Vista Outdoor has engaged reputable financial and legal advisers to ensure that the transaction is sound and aligned with the best interests of stockholders. Morgan Stanley & Co. LLC serves as the sole financial adviser to Vista Outdoor, while Cravath, Swaine & Moore LLP provides legal counsel. Independent directors of Vista Outdoor have additional support from Moelis & Company LLC as their financial adviser and Gibson, Dunn & Crutcher LLP for legal matters.
Vista Outdoor’s continued commitment to shareholders
Vista Outdoor remains steadfast in its mission to deliver maximum value to its shareholders. The company's strategic focus is underpinned by its robust portfolio of well-known outdoor brands, including Bushnell, CamelBak, Fox Racing, and Remington Ammunition. The CSG Transaction is a natural extension of this mission, leveraging growth opportunities while providing a solid foundation for stockholders to benefit from future successes, particularly through Revelyst.
Forward-Looking statements and risks
As with any major corporate transaction, there are risks and uncertainties involved. The Vista Outdoor Board acknowledges these risks, ranging from regulatory approvals to potential impacts on relationships with key customers, vendors, and employees. However, the Board remains confident that the CSG Transaction is structured to mitigate these risks while delivering maximum value to stockholders.
Conclusion: A Vote for value mMaximization
In conclusion, the Vista Outdoor Board strongly urges stockholders to vote in favor of the CSG Transaction. This deal not only offers immediate financial rewards through cash consideration but also positions stockholders to benefit from the future growth of Revelyst. With the special meeting of stockholders just days away, the time to act is now.
Stockholders are encouraged to vote “FOR” the CSG Transaction, securing significant value for The Kinetic Group and unlocking the future potential of Revelyst.
