ANOKA, Minn. - Vista Outdoor Inc . (NYSE: NYSE:VSTO), a leading global designer, manufacturer, and marketer of outdoor sports and recreation products, is urging its stockholders to vote in favor of selling its Kinetic Group business to Czechoslovak Group a.s. (CSG) during the upcoming special meeting.
The company's board has unanimously recommended the transaction, which is set to close in July 2024, subject to stockholder approval and customary closing conditions. The recommendation comes amidst a public disagreement with MNC Capital (MNC), which has made counterclaims about the proposed deal's value and the company's engagement with them.
Vista Outdoor has refuted MNC's assertions, stating that its current share price does not yet reflect the potential value of Revelyst, which is expected to operate as a standalone entity post-separation from the Kinetic Group.
The board believes that the CSG transaction, valued at $2.1 billion, will lock in the value of the Kinetic Group while providing stockholders the opportunity to benefit from Revelyst's future potential.
Vista Outdoor has expressed concerns over MNC's continually changing financing sources and structure, highlighting that MNC has never completed a transaction of this nature.
The company has emphasized the execution risk posed by MNC's unproven track record and the lack of transparency in its financing arrangements. In contrast, the CSG deal includes committed financing and has already received all necessary regulatory approvals.
The company also addressed claims by MNC that Vista Outdoor had not engaged in good faith, detailing extensive interactions over the past two years. Vista Outdoor provided access to documents, responded to data requests, and facilitated meetings and site tours. However, MNC's failure to meet deadlines and provide required information has led the board to question their ability to finance and close a transaction.
Institutional Shareholders Services (ISS) issued an updated report, which Vista Outdoor believes is based on inaccurate claims by MNC and does not fully inform stockholders. The company has contested ISS's recommendation, maintaining that the CSG transaction is in the best interest of stockholders.
The special meeting for the vote is scheduled for July 23, 2024, and further information can be found in the company's proxy statement/prospectus filed with the U.S. Securities and Exchange Commission.
Morgan Stanley & Co. LLC and Cravath, Swaine & Moore LLP are advising Vista Outdoor, while Moelis (NYSE:MC) & Company LLC and Gibson, Dunn & Crutcher LLP are advising the independent directors.
This news article is based on a press release statement from Vista Outdoor Inc.
In other recent news, Vista Outdoor Inc. has experienced significant business developments. MNC Capital, L.P., has offered the company a $42 per share all-cash acquisition proposal, which is currently under consideration by Vista's Board.
Despite this, Vista Outdoor has chosen to uphold its agreement with Czechoslovak Group (CSG) for the sale of its ammunition division, Kinetic Group, for a revised bid of $2.1 billion.
In addition, Vista Outdoor completed the sale of its wood pellet manufacturing arm, Fiber Energy Products, to Lignetics, Inc., as part of Revelyst's GEAR Up transformation initiative. Amid these developments, Vista Outdoor reported Q4 total sales of $2.75 billion, with adjusted EBITDA margins at 16.1%.
Furthermore, analysts have updated their assessments of Vista Outdoor. While Roth/MKM and B.Riley maintained a Buy rating on the company's shares, Lake Street Capital Markets downgraded the company from Buy to Hold. These are recent developments in the operations of Vista Outdoor Inc.
InvestingPro Insights
As Vista Outdoor Inc. (NYSE: VSTO) navigates the waters of corporate transactions, the market is keeping a close eye on its financial health and future prospects. According to recent data from InvestingPro, Vista Outdoor's market capitalization stands at $2.12 billion, reflecting the scale of the company within the outdoor sports and recreation products industry. Despite a challenging environment, indicated by a negative revenue growth of -10.84% over the last twelve months as of Q4 2024, the company maintains a strong gross profit margin of 31.28%, underscoring its ability to retain profitability in core operations.
InvestingPro Tips suggest that while Vista Outdoor has not been profitable over the last twelve months, analysts are optimistic about the company's future, predicting a return to profitability this year. This aligns with the company's strategic moves, such as the potential sale of its Kinetic Group business, which could unlock value and streamline operations. Furthermore, the company's liquid assets exceed its short-term obligations, providing financial stability amidst ongoing negotiations and potential transactions.
For investors considering Vista Outdoor's stock, it is noteworthy that the company has experienced a large price uptick over the last six months, with a 29.53% total price return, reflecting investor confidence. However, the company does not pay a dividend, which may influence the investment decisions of income-focused shareholders. For those seeking more in-depth analysis, there are additional InvestingPro Tips available, which can be accessed through the platform. Remember to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, which includes these valuable insights.
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