DALLAS - MNC Capital Partners, L.P. has announced an increased all-cash offer to acquire all outstanding shares of Vista Outdoor, Inc. (NYSE: NYSE:VSTO) for $39.50 per share, valuing the company at over $3.0 billion.
This new proposal represents a 46% premium over the volume-weighted average price (VWAP) from the period between the announcement of Vista's transaction with the Czechoslovak Group a.s. (CSG) on October 16, 2023, and the day before MNC's initial bid on February 19, 2024. The offer also exceeds the last closing price before MNC's first bid by over 30%.
The revised bid implies a valuation of over $1 billion for Revelyst, a significant increase from Vista's February 1, 2024, valuation of $570 million. MNC indicated that its offer is based on an assumption of $50 million in transaction expenses for Vista and will adjust the offer accordingly once the actual expenses are disclosed.
MNC's pursuit of Vista intensified on May 17, 2024, when they approached Vista's Board requesting further information to potentially increase their offer. According to MNC, Vista did not provide the requested details, including the costs associated with advisors and additional employee payments related to the Kinetic sale. Despite this, MNC has moved forward with their increased bid.
MNC has also stated that Vista's share price is likely to fall back to pre-offer levels, which were below $30.00, without the prospect of an acquisition. They noted that following the Vista Board's rejection of their previous offer on May 28, 2024, the share price declined by 3% or $1.00.
The proposal from MNC is not contingent on financing, and the firm has provided Vista with ready-to-execute debt commitment papers, pending the completion of lender due diligence.
Mark Gottfredson, Managing Director of MNC Capital, expressed confidence in the management of Kinetic Group and Revelyst and emphasized the proposal's value for Vista shareholders and its alignment with the interests of Vista's employees and U.S. security.
This news is based on a press release statement issued by MNC Capital Partners, L.P.
In other recent news, Vista Outdoor Inc . has been involved in several significant developments. The company has decided to sell its Kinetic Group business to Czechoslovak Group a.s. (CSG) for $1.96 billion, an increase from previous offers. The deal, endorsed by Institutional Shareholder Services, includes a cash consideration for Vista Outdoor stockholders of $16.00 per share and a share of common stock in Revelyst, a newly formed company.
Additionally, Vista Outdoor rejected a $37.50 per share cash bid from MNC Capital, stating it undervalued the company. The company's Board of Directors, including Chairman Michael Callahan, expressed confidence in their ongoing transaction with CSG and the potential of their business segments, particularly Revelyst.
On the financial front, Lake Street Capital Markets downgraded Vista Outdoor from Buy to Hold, despite raising the price target to $37, citing a balance between the company's strong financials and the market's current pricing.
Finally, Vista Outdoor reported a successful Q4 of fiscal year 2024, with total sales reaching $2.75 billion and adjusted EBITDA margins at 16.1%. The company also showcased robust cash flow management, significantly reducing its net debt. These are the latest developments for Vista Outdoor.
InvestingPro Insights
In light of MNC Capital Partners' revised bid for Vista Outdoor, Inc. (NYSE: VSTO), current and potential investors may find the following insights from InvestingPro particularly relevant. According to InvestingPro data, Vista Outdoor has a market capitalization of approximately $2.01 billion, which is noteworthy as MNC's offer values the company at over $3.0 billion. This suggests a substantial premium over the current market valuation.
Investors should also consider the company's recent financial performance. Vista Outdoor's P/E Ratio (Adjusted) for the last twelve months as of Q4 2024 stands at 10.4, indicating a valuation that may be attractive to investors looking for potentially undervalued stocks. Additionally, the company's strong free cash flow yield is highlighted by an InvestingPro Tip, which could be indicative of financial health and the ability to sustain operations and investments without the need for external financing.
Moreover, Vista Outdoor has not been profitable over the last twelve months, but analysts predict the company will be profitable this year. This forward-looking optimism is reflected in the company's high shareholder yield and the expectation of net income growth this year, which are both valuable InvestingPro Tips for investors considering the company's future prospects.
For those interested in further analysis and additional insights, there are 9 more InvestingPro Tips available for Vista Outdoor at Investing.com/pro/VSTO. To take advantage of these insights, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.