Kinetic Group CEO Jason Vanderbrink on Life After Vista and the Road Ahead With CSG

For over two years, the industry has watched happenings at Vista Outdoors. Vista initially set out to break itself into two separate companies. The goal was to unlock value in the non-gun portions of the massive Vista portfolio. The plan was to split the company into two publicly traded companies, Revelyst, the non-gun companies, and The Kinetic Group, the ammunition business that encompassed CCI, Federal, Remington, Hevi-Shot and Speer. 

That process changed as private groups made overtures to acquire The Kinetic Group…and from that point, the acquisition game was on. Over the past two years, offers and counteroffers from suitors flew. Two weeks ago, however, Czech Sport Group (CSG) finally closed the deal for The Kinetic Group, adding the ammunition giant to their portfolio of international holdings.

This week, QA Outdoors’ Jim Shepherd talked with The Kinetic Group’s Chairman and CEO, Jason Vanderbrink, about the arduous process, what the new ownership will mean for customers, and what’s ahead for the companies now under CSG ownership.

QA Outdoors: Jason, it’s been a long process to get the Vista separation and The Kinetic Group sale transactions all done. Please fill us in on how all of that happened. 

Jason Vanderbrink: Yeah, so on May 5, 2022, which is over 900 days from November 27 of this year when we closed the transaction, we announced that we were going to split up Vista Outdoor and two separate but publicly traded companies. We would have Revelyst and The Kinetic Group, both listed on the New York Stock Exchange.

It made sense to do that because of the valuation that Wall Street assigns to ammunition companies. We were undervalued on the outdoor product side. As long as a majority of your revenue was tied to guns or ammo, it hurt the value of Revelyst.

So to unlock the value of Revelyst to our shareholders, we had to separate it from the ammunition business, That was a great strategy, but as we started down that road, we had a lot of interest in private companies buying The Kinetic Group.

It’s been played out in the public arena, unfortunately, for the last couple of years. We had multiple bidders trying to buy The Kinetic Group which was great for shareholders.  

So fast-forwarding to a couple weeks ago, we closed the CSG transaction and the shareholders made out well. The company made out well because we’re now in private hands, which has a lot of advantages to it, especially in our industry. We found a great home for our brands, a great home for employees, and our four factories in the United States.

QA: Let me see: CCI,  Federal, Remington, Hevi-Shot and Speer are the brands. What do you say to people who are concerned that a Czech group now owns those companies? 

JV: I read all of the public reports. I understand all of the concerns, but I say to everyone, you may not like it, or doubt it, but the Czech owners with Michal Strnad and the team are fantastic owners. 

I understand it’s not American-owned anymore, but at the same time, if you look at the firearms industry, there are a plethora of firearms manufacturers that are foreign but have US manufacturing bases. Our customers, our consumers, have nothing to worry about.

While Kinetic is foreign-owned, I’m Chairman of Board for The Kinetic Group and CEO. We still have the same management team. There’s no manufacturing leaving the United States. It’s actually quite the opposite. We will further invest in the United States now that we’re in private hands. That’s what we should all be focusing on, because it’s going to lead to a lot of opportunities we wouldn’t have. Being privately held unlocked a lot of value that wouldn’t be there in the public markets.

QA: I have talked to the Czech Sport Group. I was told there’s only one logical place in the world if you want to grow your business and where there’s a permissible climate: the United States. That’s why it makes sense for these companies to be bringing their investment money this way, doesn’t it?

JV: They wanted access to the US commercial market. What better way to have access to that market than to purchase The Kinetic Group. The ironic thing about this transaction is that people are thinking we’re gonna ship manufacturing jobs or products overseas. It’s literally the opposite of that.

It’s bringing money into the United States to expand US operations while also gaining a market where they don’t play a major role. I understand all of the emotion and concern. They’re good questions and it’s a great debate to have, but when you get to the reality of it, CSG’s not gonna spend over $2 billion and buy a company to hurt the business. It’s actually quite the opposite.

QA: It probably bears mentioning the fact that CSG already has a company here – Fiocchi – and CSG’s expanding their facilities here. A new primer making facility. It’s not like CSG’s looking to minimize its presence in the United States.

JV: Exactly. 

QA: Let’s talk about your customers. What’s a retail customer going to see different under the ownership change?

JV: Absolutely nothing. They’ll see the same salesforce calling on them. That will be the exact same. It will be literally invisible to our retail customers and to the distributors. 

QA: What about to the employees? I’m sure they have concerns. 

JV: They have seen a long drawn out process. Like I said earlier, it’s unfortunate it was such a public debate. But employees have nothing to worry about. I’ve reassured them every time I go to the factories. I talk to them personally. What this does is give us exposure to some markets and customers where we don’t play. For our four factories in the United States it’s really good because it should get more business for us.

QA: Let’s talk about CSG. They already make a lot of ammunition, but it’s a little heavier caliber than most of us are dealing with. But they have expertise and the ability to bring economies of scale to you guys. Raw materials are always a concern, right?

JV: It’s week two into it, but it could. For the most part, you know, they’re large artillery builders. So you know, we should reap some benefits as a company, as it will open up some broader markets we don’t serve today. But we will still be a small caliber business.

QA: From the industry side, this has finally resolved itself. I think a lot of people were watching from the sidelines wondering “What’s going to happen next?”

JV: It took such a public public debate. I tell everyone next to the US Steel divestiture, I think we ran the headlines this year. Now I think everyone’s relieved. I know we’re relieved, the employees are relieved, and we have a good home. We have a great ownership group and it’s gonna lead to great things. I know it will. 

QA: It’s  a very public debate when a vice-presidential candidate feels the need to weigh in on the issue. 

JV: Yeah, yeah. 

QA: You said the consumer would see no difference. Let’s talk about ownership and philosophy changes. I know you’re still there. You were very involved in Vista. Vista had drawn lot of criticism from our side of the industry for being, for lack of a better term, very “touchy-feely” and politically correct, especially when it came to DEI and all the associated stuff. Does that come over with you guys, because you’re essentially the same people? Will the DEI and minority focus and anti-slave trade and all the other stuff come over from the previous ownership?

JV: No, you know a public company has a multitude of challenges. A multitude of them from Wall Street investors, and analysts. There are just certain things you have to do in a public company.

But I can assure you that there’s not a company that’s ever done more for the Second Amendment. We have, and that will be apparent. Sometimes you may wanna go more public with that…lean into it a little heavier. But there’s not a company that pays more in federal excise taxes than we do, or does more for conservation, does more for military law-enforcement, and that will not go backwards one bit.

A tremendous amount of our workforce are veterans. I think you can look at some of the things that we do. We never did those things for publicity reasons. 

The public has no idea about our support for local law enforcement or supporting local police foundations, Purple Heart recipients, Medal of Honor recipients. We never did it for publicity reasons.. We never went public, but there’s not another company in the industry that’s more committed to the Second Amendment and that will never change.

QA: I think it bears mentioning that under the Vista umbrella, you were affiliated with snowboards and skateboards and sunglasses and all of those things in areas of the outdoors that aren’t exactly…aligned with the values of the shooting sports.

JV: Yeah, but the business ran on its own. The brand groups ran on their own.The other side of the business never came in and asked us or told us where to spend money or who to support…none of that stuff. The board of directors, at the end of the day, let the businesses run. 

While Vista was a major company and a great company to work for, ultimately on The Kinetic Side, all of the business decisions started and stopped with me. Sometimes that’s lost in translation.

QA: As you said, public companies have other problems. You don’t want to have the Little Sisters of Eternal Misery forcing management to write term papers. That’s happened to other companies because of advocacy shareholders.

JV: That’s right. 

QA: That frees you up in a lot of ways operationally, right? I don’t want to say “looser” because that’s not a standard we ever want to use. But this enables you to do things you couldn’t do under a public umbrella, right? 

JV: Yeah. There are certain things that that we couldn’t do. You know, we may have wanted, for instance, to have gotten more aggressive on some marketing campaigns or go do some stuff. But at the same time, you still have to run a business built on ethics and integrity. So I mean, yes, to answer your question directly. But at the same time, you’re still going to have some of that kind of stuff, you just won’t have all the public filings.

QA: As we look down the road, what do you see in the next 18, next 24 months for Kinetic? 

JV: I see the innovation pipeline. You will see here at SHOT Show that the innovation pipeline is as robust as it’s ever been. We’re gonna launch a product at the SHOT Show that is probably the biggest product that we will have launched in our history. 

So you will see game-changing technology. We have a continued sense of urgency: how do we take more market share, become more innovative, but never lose focus that we have to be a consumer-centric organization. Whatever the consumer wants is what we have to give them. We’ll continue to do that as best we can and as fast as we can.

QA: Probably a good point at which to stop. Don’t want to look too-far down the road. Thank you, Jason.