By Anirban Sen and Abigail Summerville
NEW YORK (Reuters) - Vista Outdoor (NYSE:VSTO) on Friday agreed to sell itself in parts to two separate buyers for a total of $3.35 billion, including debt, after fending off a hostile suitor that pursued the sporting goods and ammunitions maker for months.
Vista struck a deal to sell its sporting goods unit Revelyst to investment firm Strategic Value Partners for $1.1 billion, according to a statement seen by Reuters.
It has also agreed to revise the terms of a previously agreed deal to sell its ammunitions business Kinetic to Prague-based defense contractor Czechoslovak Group (CSG).
CSG has raised its offer for Kinetic by $75 million to $2.2 billion. The company, which had initially also agreed to buy a 7.5% stake in Revelyst for $150 million, will no longer do so.
Taken together, the two deals value Vista at $45 per share, topping a rival $43 per share offer from MNC Capital, an investment firm led by former Vista board member Mark Gottfredson. MNC has repeatedly attempted to acquire Vista this year.
"The board has worked tirelessly to deliver maximum value to its stockholders, and we are pleased to have reached this agreement with SVP and CSG which helps us achieve that objective," Michael Callahan, chairman of Vista's board of directors, said in the statement.
The transaction has been approved by Vista's board of directors. The sale of Revelyst is expected to close by January, subject to regulatory approvals and the completion of the CSG deal.
The complex transaction would need to go to Vista's shareholders for a vote.
The company's earlier deal with CSG received mixed recommendations from proxy advisory firms. Glass Lewis recommended that Vista shareholders vote in favor of the proposed merger of the ammunition unit with CSG, while Institutional Shareholder Services recommended a vote against that deal.
Minnesota-based Vista is the parent of Federal Ammunition and Remington Ammunition brands, while its outdoor-product brands include Foresight Sports, CamelBak, Bushnell Golf and Simms Fishing.
The months-long saga involving Vista and MNC has played out against the backdrop of rising demand for military supplies since the escalation of the Russia-Ukraine conflict in 2022.
"With this investment, we plan to put SVP’s full operating resources and network behind Revelyst to help accelerate the success of this market leader,” said David Geenberg, head of SVP’s North America corporate investment team.
BACK AND FORTH
The bidding war for Vista kicked off earlier this year, with Vista rebuffing multiple offers from MNC and supporting the bid by CSG for Kinetic. In June, the CSG deal was cleared by the Committee on Foreign Investment in the United States, which reviews foreign investments over possible national security concerns. Colleyville, Texas-based MNC had argued that a transaction with CSG would pose a national security threat.
In July, Vista launched a strategic review to explore all its options, after failing to gather investor support for the CSG deal. The company was forced to postpone a shareholder vote to approve the deal with CSG several times in recent months in its attempts to fight off MNC's repeated overtures.
In September, MNC submitted a revised offer worth $3.2 billion, including debt, and said it would partner with an unnamed private equity firm that would own the Revelyst business to help finance its bid. Vista later separately engaged with the private equity firm, which sources said was Strategic Value Partners, on a deal for the sporting goods business.
Vista Outdoor's shares, which have risen about 35% from the beginning of the year, closed at $39.84 on Friday, giving the company a market value of about $2.33 billion.
SVP, which was launched by investor Victor Khosla in 2001, has about $19 billion of assets under management.
Morgan Stanley advised Vista on the deal, while Moelis (NYSE:MC) advised the company's board. Goldman Sachs advised SVP, while JPMorgan advised CSG.