By Anirban Sen and Abigail Summerville
NEW YORK (Reuters) – Vista Outdoor (NYSE:) agreed on Friday to sell itself in parts to two separate buyers for a total of $3.35 billion, including debt, after fending off a hostile suitor who bought the sporting goods and ammunition for months.
Vista has struck a deal to sell its sporting goods division Revelyst for $1.1 billion to investment firm Strategic Value Partners, according to a Reuters statement.
It has also agreed to revise the terms of a previously agreed deal to sell its munitions business Kinetic to Prague-based defense contractor Czechoslovak Group (CSG).
CSG has increased 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.
All told, the two deals value Vista at $45 per share, higher than a competing offer of $43 per share from MNC Capital, an 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 will help us achieve that goal,” said Michael Callahan, chairman of the board of directors of Vista, in the statement.
The transaction has been approved by Vista’s board of directors. The sale of Revelyst is expected to close in January, subject to regulatory approvals and completion of the CSG deal.
The complex transaction should go to Vista shareholders for a vote.
The company’s previous deal with CSG received mixed recommendations from proxy advisory firms. Glass Lewis recommended Vista shareholders vote in favor of the ammunition unit’s proposed merger with CSG, while Institutional Shareholder Services recommended voting against that deal.
Minnesota-based Vista is the parent company 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 surrounding Vista and MNC takes place against the backdrop of rising demand for military goods since the escalation of the conflict between Russia and Ukraine in 2022.
“With this investment, we plan to put SVP’s entire operational resources and network behind Revelyst to help accelerate the success of this industry leader,” said David Geenberg, head of SVP’s North American corporate investment team.
to and fro
The bidding war for Vista began earlier this year, with Vista rejecting multiple MNC offers and backing 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 investments for potential national security concerns. The Colleyville, Texas-based MNC had argued that a transaction with CSG would pose a threat to national security.
In July, Vista launched a strategic review to explore all options after failing to gain investor support for the CSG deal. The company has been forced to delay a shareholder vote to approve the deal with CSG several times in recent months in its efforts to counter MNC’s repeated overtures.
In September, MNC submitted a revised offer worth $3.2 billion, including debt, and said it would partner with an unnamed private equity firm that would own the Revelyst business to help finance the offer . Vista later entered into separate talks with the private equity firm, which sources said was Strategic Value Partners, about a deal for the sporting goods sector.
Shares of Vista Outdoor, which have risen about 35% since the beginning of the year, closed Friday at $39.84, giving the company a market value of about $2.33 billion.
SVP, which was launched in 2001 by investor Victor Khosla, has approximately $19 billion in assets under management.
Morgan Stanley advised Vista on the deal, while Moelis (NYSE:) advised the company’s board. Goldman Sachs advised SVP, while JPMorgan advised CSG.
