Vista Outdoor Rejects Unsolicited ‘Indication of Interest’ From MNC Capital

Vista Outdoor has announced that it has rejected the unsolicited “indication of interest” by MNC Capital in purchasing the company. They’ve issued the following statement . . .

ANOKA, MN — Vista Outdoor Inc. (“Vista Outdoor” or the “Company”) (NYSE: VSTO)  announces that its Board of Directors (the “Board”), following consultation with its financial and legal advisors, has rejected the unsolicited indication of interest received from MNC Capital (“MNC”) on March 25, 2024 pursuant to which MNC expressed interest in acquiring Vista Outdoor in an all-cash transaction for $37.50 per Vista Outdoor share. The Board issued a letter to MNC which is reproduced below.

Michael Callahan, Chairman of the Board, said, “After careful review with our financial and legal advisors and deliberation, the Board determined that the transaction contemplated by MNC’s indication of interest significantly undervalues the Company. Despite engaging with representatives of MNC over the past month, including by providing substantial non-public information under a non-disclosure agreement, we have not received an improved economic proposal or committed financing. We take our fiduciary responsibilities seriously and do not believe that the transaction contemplated by MNC’s indication of interest is in the best interest of our stockholders.”

The Board believes there is significantly more value in the Revelyst business than MNC credited in its indication of interest. The Company’s long term target of achieving mid-teens adjusted EBITDA margin and its GEAR Up initiative are expected to re-accelerate growth through increased investment in innovation and its winning brands. The Company expects to drive a $100 million improvement in adjusted EBITDA by FY27. Vista Outdoor is also well on its way to deliver on the GEAR Up initiative and expects to deliver $25-30 million in savings while doubling standalone adjusted EBITDA in FY25. Additionally the Company’s strong cash generation and pay down of total debt by $115 million in Q4 of FY24 reinforces the fact that the MNC indication of interest undervalues the Revelyst business.

Mr. Callahan continued, “We firmly believe that our pending transaction with CSG, which now includes an increased purchase price, and the separation of Revelyst as a standalone public company is the best path to drive greater value for our stockholders.”

The Board continues to recommend the acquisition of The Kinetic Group by Czechoslovak Group a.s. (“CSG”).

The full text of the letter to MNC follows:

May 28, 2024

MNC Capital

Attention: Mark Gottfredson

Mr. Gottfredson:

I am writing on behalf of Vista Outdoor Inc. (“Vista”) in response to MNC Capital’s (“MNC”) letters dated March 25, 2024, March 29, 2024, April 7, 2024 and May 17, 2024, expressing MNC’s interest in pursuing a transaction pursuant to which MNC would acquire Vista in an all-cash transaction for $37.50 per Vista share (the “MNC Revised Indication”). We also refer to the agreement and plan of merger dated as of October 15, 2023, between Vista, Revelyst, Inc., CSG Elevate II Inc., CSG Elevate III Inc., and, solely for the purposes of the Guarantor Provisions as defined therein, CZECHOSLOVAK GROUP a.s. (the “CSG Merger Agreement”).

Vista’s Board of Directors (the “Board”) has carefully reviewed the MNC Revised Indication in consultation with our financial advisors and outside legal counsel.

After a thorough evaluation of the merits and risks of the MNC Revised Indication, the Board has determined that the MNC Revised Indication would not be more favorable to Vista stockholders from a financial point of view than, and would not reasonably be expected to be superior to, the transactions contemplated by the CSG Merger Agreement. The Board has therefore rejected the MNC Revised Indication.

This determination by the Board was based on a number of factors, including that the consideration of $37.50 in cash per Vista Outdoor share in the MNC Revised Indication significantly undervalues Vista and does not take into account the significant stockholder value that is expected to be created by the separation of Revelyst and The Kinetic Group into two independent companies. This is further reinforced by the fact that Vista Outdoor decreased its total debt by $115 million in Q4 of FY24, that the Revelyst business is expected to double standalone adjusted EBITDA in FY25 and achieve mid-teens EBITDA margin in the long term and that Vista Outdoor is well on its way to delivering on the GEAR Up initiative and is expecting to deliver $25-30 million in savings in FY25.

In light of the lack of compelling value in the MNC Revised Indication and the fact that MNC has not delivered an improved economic proposal, we continue to believe that our pending transaction with CSG will drive significantly greater value for our stockholders.

The Board takes its fiduciary responsibilities seriously and is deeply committed to maximizing value for all of our stockholders. The Board is always receptive to opportunities that will help us achieve that goal.


Michael Callahan

Chairman of the Board of Directors of Vista Outdoor Inc.

Morgan Stanley & Co. LLC is acting as sole financial adviser to Vista Outdoor and Cravath, Swaine & Moore LLP is acting as legal adviser to Vista Outdoor. Moelis & Company LLC is acting as sole financial adviser to the independent directors of Vista Outdoor and Gibson, Dunn & Crutcher LLP is acting as legal adviser to the independent directors of Vista Outdoor.

One Response

  1. I believe Vista already agreed to sell all their ammo brands (Remington, CCI, Speer, etc) to an Eastern European company. (Ammo was 50 percent of their business.) What’s left after that are some optics, cook stoves, fly fishing waders, an electric bike, and a few dozen other outdoor odds and ends. I can’t tell if this offer was for everything but ammo.

Leave a Reply

Your email address will not be published. Required fields are marked *