Vista Outdoor announces cash consideration for CSG deal raised to $28 per share

Vista Outdoor’s board of directors issued the following statement: “We take seriously our duty to maximize value for stockholders. In our continued efforts to maximize stockholder value and in response to stockholder feedback, we have been conducting a thorough process with financial and legal advisors to evaluate all strategic alternatives for our businesses. We are pleased to report that the Board’s process has yielded significant value for our stockholders. After extensive diligence, CSG has agreed to make a significant investment in Revelyst which delivers increased cash consideration to stockholders. On September 12, the Company entered into an amendment to the merger agreement with Czechoslovak Group a.s. (“CSG”) in which CSG has agreed to purchase shares representing 7.5% of standalone Revelyst for $150 million (the “Revised CSG Transaction”) at a price of ~$31 per Revelyst share, valuing Revelyst at $2.0 billion. Vista Outdoor notes that the Company’s GEAR Up transformation program is delivering value in line with prior guidance. Revelyst continues to gain market share in key categories and is on track to double Adjusted EBITDA sequentially for the quarter and for the full year. The $150 million of cash payable by CSG for the purchase of Revelyst shares plus additional cash from Vista Outdoor’s balance sheet will be returned to Vista Outdoor stockholders, increasing the cash consideration payable in the Revised CSG Transaction by $4 per share to $28 per share. At the closing of the Revised CSG 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 closing of the CSG Transaction, Revelyst plans to establish an initial $50 million share repurchase program. 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 in cash per share (the “MNC Revised Proposal”). Documentation delivered to the Board in connection with the MNC Revised Proposal implies a value of ~$1.9 billion for The Kinetic Group and ~$1.2 billion for Revelyst. In comparison, the Revised CSG Transaction represents a value of $2.15 billion for The Kinetic Group and an investment in Revelyst at a value of $2.0 billion. We have engaged extensively with MNC, accommodated MNC’s diligence requests, and provided access to management. MNC has publicly confirmed that it completed its diligence. The Company notes that the MNC Revised Proposal does not represent an increase in enterprise value compared to MNC’s prior proposal when considering Vista Outdoor’s cash generated and lower net debt; however, we will continue to constructively engage with MNC and urge MNC to deliver its best and final proposal as soon as possible. Gates Capital is a conflicted party. The Board recently learned that the Company’s second largest stockholder, Gates Capital Management Inc. (“Gates Capital”), is included in MNC’s equity consortium. Given its involvement with MNC, Gates Capital’s public expression in favor of MNC’s proposal reflects a bias and conflict of interest. Consequently, Gates Capital’s interests are not aligned with those of other Vista Outdoor stockholders. We urge stockholders to make their own informed decision based on the valuation differential between the Revised CSG Transaction and the MNC Revised Proposal. The Board is, and has always been, committed to maximizing value for all Vista Outdoor stockholders and remains open to opportunities that achieve this goal. The Board continues to recommend Vista Outdoor stockholders vote in favor of the proposal to adopt the merger agreement with CSG at the special meeting of stockholders (the “Special Meeting”), which will be held at 9:00 am (Central Time) on September 27, 2024. Morgan Stanley & Co. LLC is acting as sole financial adviser to Vista Outdoor and Cravath, Swaine & Moore LLP is acting as legal adviser to Vista Outdoor. Moelis & Company LLC is acting as sole financial adviser to the independent directors of Vista Outdoor and Gibson, Dunn & Crutcher LLP is acting as legal adviser to the independent directors of Vista Outdoor.”