ANOKA, Minn. - Vista Outdoor Inc . (NYSE: NYSE:VSTO) announced Monday that Institutional Shareholder Services (ISS) has recommended that its stockholders vote in favor of selling its Kinetic Group business to Czechoslovak Group a.s. (CSG). The special meeting for stockholders to vote on the proposed sale is set for June 14, 2024.
The transaction, revised on May 27, 2024, now values the Kinetic Group at $1.96 billion, up from previous offers. The amended terms also increase the cash consideration for Vista Outdoor stockholders to $16.00 per share. Upon closing, stockholders will receive one share of common stock in Revelyst, a new company, in addition to the cash consideration for each share of Vista Outdoor common stock they hold.
ISS, in its May 31 report, highlighted the board's extensive strategic review, which included reaching out to 26 parties and receiving five offers. The review also involved a one-month pause to consider a higher bid from another company, during which CSG improved its offer.
ISS praised the cash component of the deal for providing "certainty of value" for the Kinetic Group business, while the stock component allows stockholders to participate in the potential upside of Revelyst.
Vista Outdoor expressed satisfaction with ISS's endorsement, emphasizing the transaction's value to its stockholders and the thorough process undertaken by the board to finalize the deal. The company anticipates that the sale to CSG and the establishment of Revelyst as an independent public entity will maximize stockholder value.
Advising Vista Outdoor on the transaction are Morgan Stanley (NYSE:MS) & Co. LLC as the sole financial adviser and Cravath, Swaine & Moore LLP as legal adviser. Moelis (NYSE:MC) & Company LLC and Gibson, Dunn & Crutcher LLP are advising the independent directors of Vista Outdoor.
Vista Outdoor is known for its portfolio of over three dozen brands in the outdoor and sporting product sectors, including Bushnell, CamelBak, and Federal Ammunition.
The information in this article is based on a press release statement from Vista Outdoor Inc.
InvestingPro Insights
As Vista Outdoor Inc. (NYSE: VSTO) prepares for the sale of its Kinetic Group business and the creation of Revelyst, a closer look at the company's financial metrics and analyst insights from InvestingPro provides a nuanced perspective for stockholders. With a market capitalization of $2.03 billion, Vista Outdoor is positioned as a significant player in the outdoor and sporting products sectors.
An InvestingPro Tip highlights that the company's net income is expected to grow this year, aligning with the positive outlook following the endorsement from ISS. Additionally, the valuation implies a strong free cash flow yield, which could be indicative of the company's ability to generate ample cash post-transaction. These insights suggest that the deal could indeed be a value-maximizing move for shareholders looking for growth and a solid cash position.
Key metrics from InvestingPro reveal a P/E ratio (adjusted for the last twelve months as of Q4 2024) of 10.53, suggesting a reasonable valuation relative to earnings. Furthermore, the company's liquid assets exceed its short-term obligations, which is reassuring for investors concerned about the company's financial health during this transition period. Notably, Vista Outdoor is trading near its 52-week high, with its price at 95.96% of this peak, reflecting a strong market sentiment.
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