Exclusive-Vista Outdoor strikes deal to sell itself in two parts for $3.4 billion By Reuters

By Anirban Sen and Abigail Summerville

NEW YORK (Reuters) – Vista Outdoor ( NYSE: ) agreed on Friday to sell itself in part to two separate buyers for a total of $3.35 billion, including debt, after fending off a hostile suitor that had been chasing it for months on the manufacturer of sporting goods and ammunition.

Vista has struck a deal to sell its Revelyst sporting goods unit to investment firm Strategic Value Partners for $1.1 billion, according to a statement seen by Reuters.

It also agreed to revise the terms of a previously agreed deal to sell its Kinetic munitions business to Prague-based defense contractor Czechoslovak Group (CSG).

CSG raised its bid for Kinetic by $75 million to $2.2 billion. The company, which initially agreed to buy a 7.5 percent stake in Revelyst for $150 million, will no longer do so.

Taken together, the two deals value Vista at $45 a share, beating a rival offer of $43 a 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, which helps us achieve that goal,” Michael Callahan, chairman of Vista’s board, said in the statement .

The transaction has been approved by Vista’s board of directors. The sale of Revelyst is expected to close by January, subject to regulatory approvals and completion of the CSG deal.

The complex transaction would have to go to a vote for Vista shareholders.

The company’s previous deal with CSG received mixed recommendations from proxy advisory firms. Glass Lewis recommended that Vista shareholders vote in favor of the proposed merger of the ammunition unit with CSG, while Institutional Shareholder Services recommended a vote against the deal.

Minnesota-based Vista is the parent 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 involving Vista and MNC has played out against a backdrop of growing demand for military supplies since the escalation of the Russia-Ukraine conflict in 2022.

“With this investment, we plan to put all of SVP’s operating resources and network behind Revelyst to help accelerate the success of this market leader,” said David Geenberg, head of SVP’s North American corporate investment team.

BACK AND FORTH

The bidding war for Vista began earlier this year, with Vista rejecting multiple bids from MNC and supporting 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 investment for possible national security concerns. Colleyville, Texas-based MNC argued that a deal with CSG would pose a threat to national security.

In July, Vista launched a strategic review to explore all its options after failing to garner 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 attempts to fight off repeated overtures from MNC.

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 will own the Revelyst business to help finance its bid. Vista later engaged separately with the private equity firm, which sources said was Strategic Value Partners, on a deal for the sporting goods business.

Shares of Vista Outdoor, which have risen about 35% since the start of the year, closed Friday at $39.84, giving the company a market value of about $2.33 billion.

SVP, which was launched by investor Victor Khosla in 2001, has approximately $19 billion in assets under management.

Morgan Stanley advised Vista on the transaction, while Moelis (NYSE: ) advised the company’s board of directors. Goldman Sachs advised SVP, while JPMorgan advised CSG.