Vista Outdoor to sell sporting products business to CSG for $1.91B in cash

Vista Outdoor announced a definitive agreement to sell its sporting products business to Czechoslovak Group, or CSG, for an enterprise value of $1.91B in an all-cash transaction subject to customary closing conditions. This transaction represents the next step in Vista Outdoor’s plan to split the company into separate entities, which was previously announced on May 5, 2022. CSG is 100% owned and led by Michal Strnad. The transaction values the Sporting Products business at an enterprise value of $1.91 billion, on a cash-free, debt-free basis with a normalized level of working capital, and is supported by $1.11 billion of fully committed debt financing with the remaining amount funded by CSG. The valuation is approximately 5x enterprise value to Sporting Products FY24 EBITDA, including estimated standalone costs. To effect the transaction, Vista Outdoor will separate its Outdoor Products business from its Sporting Products business, and CSG will merge one of its subsidiaries with Vista Outdoor (holding only the Sporting Products business), with current public stockholders of Vista Outdoor receiving shares of Outdoor Products (recently rebranded as Revelyst) and approximately $750 million in cash in the aggregate. This will be treated as a taxable sale of a stockholder’s Vista Outdoor shares for the Outdoor Products shares and cash consideration they receive in the merger, allowing stockholders to recover tax basis and recognize built-in gain and loss in their Vista Outdoor shares. Relative to a divestiture of Sporting Products as an asset sale, this structure has corporate level tax of approximately $50 million versus approximately $380 million for a divestiture as an asset sale and allows for the tax-efficient return of cash to stockholders. The transaction is expected to close in calendar year 2024, subject to approval of our stockholders, receipt of necessary regulatory approvals and other customary closing conditions. Upon closing, Vanderbrink will remain CEO of the Sporting Products business and the U.S. headquarters will remain in Anoka, Minnesota. In connection with the transaction, the company’s approximately 4,000 employees who represent four factories and the consumer brands CCI, Federal, HEVI-Shot, Remington and Speer will continue their heritage of community and conservation support through local and national organizations. Upon completion of the sale of the Sporting Products business to CSG, Vista Outdoor’s Outdoor Products business will become Revelyst, an independent publicly traded company trading on the New York Stock Exchange under the ticker “GEAR.” Revelyst will leverage meticulous craftsmanship and cross-collaboration across its portfolio of category-defining brands. Brands include Fox, Bell, Giro, CamelBak, Camp Chef, Bushnell, Simms Fishing, Foresight Sports, Bushnell Golf and more. Eric Nyman will continue as CEO of Outdoor Products and become the CEO of Revelyst upon transaction close.