ANOKA, Minn. - Revelyst, a segment of Vista Outdoor Inc . (NYSE: NYSE:VSTO), has completed the sale of its wood pellet manufacturing arm, Fiber Energy Products, to Lignetics, Inc., a move that aligns with the company's strategic refocusing efforts. Fiber Energy, which has produced 100% all-natural wood pellets since 2006, has been acquired by Lignetics, the largest residential wood pellet manufacturer in the U.S.
The divestiture is part of Revelyst's GEAR Up transformation initiative, aimed at streamlining its portfolio to concentrate on the most profitable and high-value segments. This strategic sale is intended to enable Revelyst to invest further in product innovation and its leading brands.
Jordan Judd, President of Revelyst Outdoor Performance, stated that partnering with Lignetics marks a significant step for Fiber Energy, providing it with the necessary resources and scale to achieve its full potential. Judd emphasized that the sale will generate capital for Revelyst to reinvest in its power brands and support its growth strategy.
Fiber Energy, with facilities in Arkansas and Missouri, is known for its premium hardwood and softwood heating pellets, BBQ and grilling pellets, and animal bedding products. The acquisition by Lignetics, headquartered in Broomfield, Colorado, is expected to enhance the reach and capabilities of Fiber Energy's product line.
Financial advisory for the transaction was provided by Baird, with legal advice from Reed Smith LLP. The financial terms of the deal have not been disclosed.
This sale comes as Lignetics continues to expand its portfolio of eco-friendly products, which includes home heating pellets, barbecue pellets, and high-performance cat litter. Lignetics delivers these products through a network of 27 plant locations across the U.S. and Canada.
The information in this article is based on a press release statement from Vista Outdoor Inc.
In other recent news, Vista Outdoor Inc. has experienced noteworthy developments.
The company decided to reject a $3.2 billion buyout proposal from MNC Capital Partners, instead favoring an improved offer from Czechoslovak Group (CSG) for the acquisition of its ammunition division, Kinetic Group. CSG's increased bid now stands at $2.1 billion. As part of the CSG deal, shareholders are set to receive $21.00 in cash and one share of Revelyst common stock for each share they hold, pending approval at a special meeting.
Simultaneously, Vista Outdoor reported Q4 total sales of $2.75 billion, with adjusted EBITDA margins at 16.1%. Amidst these ongoing negotiations, analyst firms have updated their assessments. While Roth/MKM and B.Riley maintained a Buy rating on Vista Outdoor shares, Lake Street Capital Markets downgraded the company from Buy to Hold.
These are the recent developments in Vista Outdoor's operations.
InvestingPro Insights
In the wake of Revelyst's strategic divestiture of Fiber Energy Products, Vista Outdoor Inc. (NYSE: VSTO) appears poised to sharpen its focus on core operations and growth initiatives. Investors closely monitoring VSTO's financial health will find several metrics and InvestingPro Tips that shed light on the company's current standing and future prospects.
With a market capitalization of $2.17 billion, Vista Outdoor's financial scale is noteworthy. The company's price-to-earnings (P/E) ratio, adjusted for the last twelve months as of Q4 2024, stands at 11.2, suggesting a valuation that may catch the eye of value-oriented investors. Additionally, Vista Outdoor's price-to-book ratio during the same period is 1.92, which could indicate that the company's assets are being valued reasonably in the market.
InvestingPro Tips highlight that Vista Outdoor boasts a high shareholder yield, which could be attractive to investors seeking companies that prioritize shareholder returns. Furthermore, analysts predict that the company will be profitable this year, a positive sign for potential investors. It's worth noting that there has been a large price uptick over the last six months, with a 31.53% total return, reflecting investor confidence and market momentum.
For those interested in deeper analysis, InvestingPro offers more tips for Vista Outdoor. Subscribers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing access to comprehensive insights that could further inform investment decisions. As of now, there are 8 additional InvestingPro Tips available, which delve into various aspects of Vista Outdoor's financial and market performance.
Whether you're considering an investment in Vista Outdoor or simply keeping an eye on the industry, these insights could provide valuable context to the company's recent strategic moves and future direction.
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