Vista Outdoor announced today that its Board of Directors has issued the following statement: The Board is committed to maximizing value for our stockholders. In response to stockholder feedback and as part of our ongoing efforts, we have been working with financial and legal advisors to explore all strategic alternatives for our businesses. We are pleased to report that our process has significantly increased value for our stockholders.
Following thorough diligence, Czechoslovak Group a.s. (CSG) has agreed to make a substantial investment in Revelyst, resulting in increased cash consideration for our stockholders. On September 12, Vista Outdoor entered into an amendment to the merger agreement with CSG, in which CSG will purchase shares representing 7.5% of standalone Revelyst for $150 million. This revised transaction values Revelyst at $2.0 billion, with CSG agreeing to pay approximately $31 per Revelyst share.
As part of this revised agreement, the cash from CSG’s investment, combined with additional funds from Vista Outdoor’s balance sheet, will be returned to stockholders. This adjustment increases the cash consideration in the revised CSG transaction to $28 per share. Upon closing of the transaction, Vista Outdoor stockholders will receive $28 in cash per share and one share of Revelyst common stock for each share of Vista Outdoor common stock.
Following the transaction, Revelyst plans to initiate a $50 million share repurchase program.
Vista Outdoor also notes that the MNC Revised Proposal significantly undervalues The Kinetic Group and Revelyst compared to the revised CSG transaction. On September 6, we received a revised proposal from MNC to acquire the company for $43 per share in cash. This proposal implies valuations of approximately $1.9 billion for The Kinetic Group and $1.2 billion for Revelyst, compared to the $2.15 billion value for The Kinetic Group and $2.0 billion valuation for Revelyst in the revised CSG transaction.
We have engaged extensively with MNC, accommodated their diligence requests, and provided access to management. MNC has confirmed the completion of its diligence, but the MNC Revised Proposal does not offer an increase in enterprise value compared to their prior offer, considering Vista Outdoor’s cash generation and lower net debt. We encourage MNC to present their best and final offer as soon as possible.
It has come to our attention that Gates Capital Management Inc., Vista Outdoor’s second-largest stockholder, is part of MNC’s equity consortium. This involvement indicates a potential conflict of interest, as Gates Capital’s public support for MNC’s proposal may not align with the interests of all Vista Outdoor stockholders. We urge stockholders to consider the valuation differences between the revised CSG transaction and the MNC Revised Proposal.
The Board remains dedicated to maximizing value for all stockholders and is open to opportunities that achieve this goal. We continue to recommend that stockholders vote in favor of the merger agreement with CSG at the special meeting of stockholders, scheduled for 9:00 am (Central Time) on September 27, 2024.
Morgan Stanley & Co. LLC is serving as sole financial adviser to Vista Outdoor, and Cravath, Swaine & Moore LLP is acting as legal adviser. Moelis & Company LLC is acting as sole financial adviser to the independent directors of Vista Outdoor, with Gibson, Dunn & Crutcher LLP serving as their legal adviser.
