ANOKA, Minn. - Vista Outdoor Inc . (NYSE:VSTO), a leading global designer and manufacturer of outdoor sports and recreation products, announced Monday that it has revised its merger agreement with Czechoslovak Group a.s. (CSG), increasing the transaction value by $50 million. The amendment to the agreement raises the purchase price for Vista Outdoor's Kinetic Group business to $1.96 billion.
Under the new terms, Vista Outdoor stockholders will receive $16.00 per share in cash, a 24% increase from the previous $12.90 per share. Moreover, each stockholder will receive one share of common stock of Revelyst, a newly formed entity, for each share of Vista Outdoor common stock owned.
The increase in cash consideration is partly funded by approximately $130 million of excess cash generated by Vista Outdoor in the fourth quarter. This is in addition to the $50 million purchase price bump provided by CSG. Post-transaction, Revelyst plans to return any cash in excess of $250 million to its stockholders through a share buyback or a special dividend.
The transaction's completion, expected within the 2024 calendar year, is contingent upon approval from Vista Outdoor stockholders, clearance from the Committee on Foreign Investment in the United States (CFIUS), and other customary closing conditions. Vista Outdoor has expressed confidence in meeting these conditions, including obtaining CFIUS clearance.
Morgan Stanley & Co. LLC serves as the sole financial adviser to Vista Outdoor, with Cravath, Swaine & Moore LLP as its legal adviser. Moelis (NYSE:MC) & Company LLC and Gibson, Dunn & Crutcher LLP are advising the independent directors of Vista Outdoor financially and legally, respectively.
This announcement follows Vista Outdoor's consistent performance in the sporting and outdoor product segments, with brands such as Bushnell, CamelBak, and Federal Ammunition under its umbrella. The company's Adjusted EBITDA, a non-GAAP financial measure, is used to assess its operating performance.
The details of this amended merger agreement are based on a press release statement from Vista Outdoor. The company cautions investors not to place undue reliance on forward-looking statements, which are subject to various risks and uncertainties.
InvestingPro Insights
Vista Outdoor Inc. (NYSE:VSTO) has made headlines with its revised merger agreement, signaling an optimistic outlook from the company's management. To understand the financial health and market sentiment surrounding Vista Outdoor, a glimpse at key metrics and insights from InvestingPro can offer additional clarity for investors.
InvestingPro data indicates that Vista Outdoor has a market capitalization of $2.03 billion, illustrating the company's substantial presence in the outdoor sports and recreation products market. Despite facing revenue challenges with a decline of 10.84% over the last twelve months as of Q4 2024, the company's gross profit margin remains strong at 31.28%, showcasing its ability to maintain profitability in core operations.
An InvestingPro Tip highlights that Vista Outdoor's net income is expected to grow this year, which aligns with the company's strategic moves, such as the revised merger agreement with CSG. The company's valuation implies a strong free cash flow yield, suggesting that investors may find the stock to be an attractive investment based on its ability to generate cash.
Moreover, the company is trading near its 52-week high, with a price 95.96% of that peak, reflecting investor confidence in its current strategy and future prospects. This is further supported by a significant price uptick over the last six months, with a 26.22% return, indicating a bullish trend in the stock's performance.
For investors seeking to delve deeper into Vista Outdoor's potential, InvestingPro offers additional insights and metrics. There are over 10 InvestingPro Tips available, which can be accessed for a more comprehensive analysis of the company's financials and market position. To enhance your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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