ANOKA, Minn. - Vista Outdoor Inc . (NYSE: NYSE:VSTO) announced an agreement to sell a 7.5% stake in its subsidiary Revelyst to Czechoslovak Group a.s. (CSG) for $150 million, valuing the company at $2 billion. This transaction is part of a revised merger agreement dated September 12.
The deal will increase the cash consideration payable to Vista Outdoor stockholders by $4 per share to $28 per share. Upon closure, stockholders will receive this cash amount and one share of Revelyst common stock for each Vista Outdoor share they hold.
Following the transaction's completion, Revelyst plans to initiate a $50 million share repurchase program. The company emphasizes that its GEAR Up transformation program is meeting its financial targets and Revelyst is expected to double its Adjusted EBITDA sequentially for the quarter and the year.
Vista Outdoor's board has also been in discussions with MNC regarding a potential acquisition. MNC's latest offer of $43 per share for Vista Outdoor was deemed insufficient compared to the CSG deal. The board continues to engage with MNC and has urged it to submit a best and final proposal.
The board has discovered that Gates Capital Management Inc., Vista Outdoor's second-largest shareholder, is part of the consortium backing MNC's proposal, leading to a potential conflict of interest. Vista Outdoor's board recommends that shareholders vote in favor of the CSG transaction at the upcoming special meeting scheduled for September 27, 2024.
Morgan Stanley (NYSE:MS) & Co. LLC and Cravath, Swaine & Moore LLP are advising Vista Outdoor, while Moelis (NYSE:MC) & Company LLC and Gibson, Dunn & Crutcher LLP are advising its independent directors.
The information in this article is based on a press release statement from Vista Outdoor Inc.
InvestingPro Insights
As Vista Outdoor Inc. (NYSE: VSTO) navigates through its strategic transactions, including the sale of a stake in Revelyst and the ongoing discussions with MNC, investors are closely monitoring the company's financial health and market position. According to InvestingPro data, Vista Outdoor currently has a market capitalization of around $2.35 billion. Despite a challenging period reflected by a negative revenue growth of -9.21% over the last twelve months as of Q1 2025, the company's gross profit margin remains robust at 31.27%.
InvestingPro Tips suggest a mixed outlook for Vista Outdoor. The company is trading near its 52-week high, with its price at 97.66% of this peak, indicating strong recent performance in the stock market. Additionally, analysts have a positive outlook on Vista Outdoor's profitability, expecting net income growth this year. However, it's noteworthy that the company has not been profitable over the last twelve months, which could be a point of concern for potential investors. Moreover, two analysts have revised their earnings downwards for the upcoming period, suggesting that there may be challenges ahead.
Investors might also find comfort in the company's liquidity position, as Vista Outdoor's liquid assets exceed its short-term obligations. This could be particularly relevant in the context of the company's ongoing merger and acquisition activities. Moreover, the InvestingPro platform offers further insights with additional tips available for those looking to delve deeper into Vista Outdoor's financials and market prospects.
For those interested in following Vista Outdoor's financial journey and obtaining more in-depth analysis, additional InvestingPro Tips can be found on the InvestingPro platform, providing a comprehensive resource for making informed investment decisions.
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