Urges Stockholders to Vote “FOR” the CSG
Transaction at Upcoming Special Meeting of Vista Outdoor
Stockholders
Vista Outdoor Inc. (“Vista Outdoor” or “the Company”) (NYSE:
VSTO) today issued the following statement in response to claims
made by MNC Capital (“MNC”) and an updated report issued by
Institutional Shareholders Services (“ISS”) relating to the sale of
The Kinetic Group business to Czechoslovak Group a.s. (“CSG”):
Contrary to MNC’s Claims, Vista Outdoor’s
Current Share Price Does Not Reflect the Value Expected to Be
Unlocked From A Standalone Publicly Traded Revelyst
We made the decision to separate Revelyst and
The Kinetic Group for the purpose of optimizing both businesses and
unlocking additional value for our stockholders. We note that Mark
Gottfredson, managing director of MNC, voted in favor of the
separation of Revelyst and The Kinetic Group when he was a director
of Vista Outdoor. Fundamentally, the Board believes the value of
Revelyst is not yet captured by Vista Outdoor’s stock price today
as the two businesses have not yet separated.
We believe it is critical to allow Revelyst
to trade as a pure-play standalone publicly traded company in order
to trade in line with its peers, attract its natural owners, and
achieve the value that we are confident it will deliver for
stockholders. Stockholder approval of the sale of The Kinetic Group
to CSG (the “CSG Transaction”) will enable stockholders to retain
the ability to realize a potential change of control premium for
Revelyst in the future. Our Board of Directors is and always
remains open to opportunities to maximize stockholder value and may
consider pursuing a range of strategic alternatives for Revelyst at
the appropriate time and at the appropriate valuation. If the Board
believed it were strategically and financially beneficial to
stockholders to sell Revelyst, the Board would engage in a thorough
and competitive process to do so, just like the Board has done with
respect to The Kinetic Group.
Stockholders should ask themselves: Why would
Vista Outdoor choose to sell Revelyst now at a discount to an
opportunistic party like MNC without running a comprehensive
process in the right market environment as we did for The Kinetic
Group?
In contrast, the CSG Transaction maximizes
value for stockholders by locking in the $2.1 billion value of The
Kinetic Group, while also allowing stockholders to participate in
the upside of a standalone Revelyst.
Contrary to MNC’s Claims, Vista Outdoor
Believes MNC’s Continually Shifting Financing Sources Pose
Significant Execution Risk
Throughout Vista Outdoor’s engagement with
MNC, MNC’s financing sources and structure have continually
shifted. MNC’s latest financing includes new debt and equity
partners relative to their prior offer, none of which have ever
been publicly disclosed to stockholders, as is customary for
transactions of this nature. It is also important to note that MNC
has never completed a transaction. For these reasons, there can be
no assurance that MNC will ultimately come through with the
financing necessary to execute their proposed transaction.
Further, MNC’s final indication still remains
subject to additional due diligence, despite Vista Outdoor having
engaged with MNC for six weeks in May and June 2024 (in addition to
the extensive engagement prior to signing the CSG merger
agreement). A transaction with MNC would require regulatory
approvals and would take multiple months to close.
Stockholders should ask themselves: Why would
Vista Outdoor choose to forego a transaction with CSG in order to
attempt to execute a transaction with an inexperienced and unproven
party with continually shifting financing that will take multiple
months to close? In contrast, the CSG Transaction includes
committed financing and certainty to close given we have received
all regulatory approvals required under the merger agreement and
are prepared to close in July 2024, subject to receipt of
stockholder approval and satisfaction of other customary closing
conditions.
Contrary to MNC’s Claims, Vista Outdoor
Has Engaged Extensively and In Good Faith With MNC Over the Past
Two Years
There is no basis to MNC’s claim that we have
not engaged in good faith with them. In fact, in addition to
extensive engagement with MNC prior to signing the CSG merger
agreement, we engaged extensively with them for six weeks in May
and June 2024, even though MNC stated they would only need 14 days
to complete diligence. We have provided them access to
approximately 4,900 documents, answered over 1,050 data requests,
held over 35 meetings or calls, gave extensive access to the
management team and supported multiple site tours. Despite our good
faith engagement, MNC has failed to meet multiple deadlines and has
delayed and refused many of our requests for clarification or
additional information in connection with their indications of
interest, including in regard to its financing arrangements. Due to
this concerning behavior and inability to supply the information
needed in a fulsome and timely manner, the Board became
increasingly skeptical of MNC’s ability to fully finance and
successfully close a transaction.
Vista Outdoor is bound by the merger
agreement with CSG and therefore the Company may only engage with
respect to unsolicited offers if the standard for engagement under
the CSG merger agreement is met, including that the offer would
reasonably be expected to lead to a superior proposal. To be clear,
we requested MNC’s financing commitments and a merger agreement so
the Board of Directors, along with its financial and legal
advisors, could conduct the most thorough and comprehensive review
of its final indication of interest, and to determine if there was,
in fact, a basis to engage under the CSG merger agreement.
Following evaluation of MNC’s final offer, the Board unanimously
determined that MNC’s final offer would not be more favorable to
Vista Outdoor stockholders from a financial point of view than the
CSG transaction and there was no basis to engage on MNC’s final
offer given that MNC made clear they have “absolutely no intention”
of raising their final offer and no further room to provide
incremental value.
Stockholders should ask themselves: Why would
Vista Outdoor engage with MNC on its $42.00 per share offer that we
believe fundamentally undervalues Revelyst, has no chance of
increasing further, and is not in the best interest of
stockholders? In contrast, the CSG Transaction achieves the
objective the Board set out to accomplish when it announced the
plan to separate the businesses in May 2022: maximizing the value
of Vista Outdoor’s two business segments for the benefit of
stockholders.
Vista Outdoor strongly believes ISS has
reached the wrong conclusion with respect to the CSG transaction
and disagrees with the short-sighted and misinformed recommendation
to Vista Outdoor stockholders.
ISS’ updated recommendation relies heavily on
inaccurate claims made by MNC. Vista Outdoor and its advisors have
repeatedly offered to have discussions with ISS to enable ISS to
develop a fully informed opinion regarding the CSG Transaction and
MNC’s final indication of interest for the benefit of ISS’
subscribers, but ISS has refused to accept those offers to engage
with the Company. As a result, the Company believes the ISS report
does not provide a full and fair recommendation to Vista Outdoor
stockholders.
Furthermore, the implied valuation of
Revelyst that Vista Outdoor stockholders would receive under the
current MNC proposal is lower than under MNC’s proposal when ISS
previously recommended FOR the CSG Transaction, so we do not
understand how ISS’ recommendation has changed.
The Board of Directors continues to
unanimously recommend that stockholders vote “FOR” the proposal to
adopt the CSG Transaction.
The special meeting of Vista Outdoor stockholders to, among
other things, vote on a proposal to adopt the merger agreement with
CSG, is scheduled to be held virtually on July 23, 2024, at 9:00
a.m. Central Time.
Additional information can be found in Vista Outdoor’s proxy
statement/prospectus and the supplements thereto filed with the
U.S. Securities and Exchange Commission (the “SEC”), including the
most recent supplement to the proxy statement/prospectus dated June
8, 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.
About Vista Outdoor Inc.
Vista Outdoor (NYSE: VSTO) is the parent company of more than
three dozen renowned brands that design, manufacture and market
sporting and outdoor products. Brands include Bushnell, CamelBak,
Bushnell Golf, Foresight Sports, Fox Racing, Bell Helmets, Camp
Chef, Giro, Simms Fishing, QuietKat, Stone Glacier, Federal
Ammunition, Remington Ammunition and more. Our reporting segments,
Outdoor Products and Sporting Products, provide consumers with a
wide range of performance-driven, high-quality and innovative
outdoor and sporting products. For news and information, visit our
website at www.vistaoutdoor.com.
Forward-Looking Statements
Some of the statements made and information contained in this
press release, excluding historical information, are
“forward-looking statements,” including those that discuss, among
other things: Vista Outdoor Inc.’s (“Vista Outdoor”, “we”, “us” or
“our”) plans, objectives, expectations, intentions, strategies,
goals, outlook or other non-historical matters; projections with
respect to future revenues, income, earnings per share or other
financial measures for Vista Outdoor; and the assumptions that
underlie these matters. The words “believe,” “expect,”
“anticipate,” “intend,” “aim,” “should” and similar expressions are
intended to identify such forward-looking statements. To the extent
that any such information is forward-looking, it is intended to fit
within the safe harbor for forward-looking information provided by
the Private Securities Litigation Reform Act of 1995.
Numerous risks, uncertainties and other factors could cause our
actual results to differ materially from the expectations described
in such forward-looking statements, including the following: risks
related to the previously announced transaction among Vista
Outdoor, Revelyst, Inc. (“Revelyst”), CSG Elevate II Inc., CSG
Elevate III Inc. and CZECHOSLOVAK GROUP a.s. (the “Transaction”),
including (i) the failure to receive, on a timely basis or
otherwise, the required approval of the Transaction by our
stockholders, (ii) the possibility that any or all of the various
conditions to the consummation of the Transaction may not be
satisfied or waived, including the failure to receive any required
regulatory approvals from any applicable governmental entities (or
any conditions, limitations or restrictions placed on such
approvals), (iii) the possibility that competing offers or
acquisition proposals may be made, (iv) the occurrence of any
event, change or other circumstance that could give rise to the
termination of the merger agreement relating to the Transaction,
including in circumstances which would require Vista Outdoor to pay
a termination fee, (v) the effect of the announcement or pendency
of the Transaction on our ability to attract, motivate or retain
key executives and employees, our ability to maintain relationships
with our customers, vendors, service providers and others with whom
we do business, or our operating results and business generally,
(vi) risks related to the Transaction diverting management’s
attention from our ongoing business operations and (vii) that the
Transaction may not achieve some or all of any anticipated benefits
with respect to either business segment and that the Transaction
may not be completed in accordance with our expected plans or
anticipated timelines, or at all; impacts from the COVID-19
pandemic on our operations, the operations of our customers and
suppliers and general economic conditions; supplier capacity
constraints, production or shipping disruptions or quality or price
issues affecting our operating costs; the supply, availability and
costs of raw materials and components; increases in commodity,
energy, and production costs; seasonality and weather conditions;
our ability to complete acquisitions, realize expected benefits
from acquisitions and integrate acquired businesses; reductions in
or unexpected changes in or our inability to accurately forecast
demand for ammunition, accessories, or other outdoor sports and
recreation products; disruption in the service or significant
increase in the cost of our primary delivery and shipping services
for our products and components or a significant disruption at
shipping ports; risks associated with diversification into new
international and commercial markets, including regulatory
compliance; our ability to take advantage of growth opportunities
in international and commercial markets; our ability to obtain and
maintain licenses to third-party technology; our ability to attract
and retain key personnel; disruptions caused by catastrophic
events; risks associated with our sales to significant retail
customers, including unexpected cancellations, delays, and other
changes to purchase orders; our competitive environment; our
ability to adapt our products to changes in technology, the
marketplace and customer preferences, including our ability to
respond to shifting preferences of the end consumer from brick and
mortar retail to online retail; our ability to maintain and enhance
brand recognition and reputation; others’ use of social media to
disseminate negative commentary about us, our products, and
boycotts; the outcome of contingencies, including with respect to
litigation and other proceedings relating to intellectual property,
product liability, warranty liability, personal injury, and
environmental remediation; our ability to comply with extensive
federal, state and international laws, rules and regulations;
changes in laws, rules and regulations relating to our business,
such as federal and state ammunition regulations; risks associated
with cybersecurity and other industrial and physical security
threats; interest rate risk; changes in the current tariff
structures; changes in tax rules or pronouncements; capital market
volatility and the availability of financing; foreign currency
exchange rates and fluctuations in those rates; general economic
and business conditions in the United States and our markets
outside the United States, including as a result of the war in
Ukraine and the imposition of sanctions on Russia, the COVID-19
pandemic, conditions affecting employment levels, consumer
confidence and spending, conditions in the retail environment, and
other economic conditions affecting demand for our products and the
financial health of our customers.
You are cautioned not to place undue reliance on any
forward-looking statements we make, which are based only on
information currently available to us and speak only as of the date
hereof. A more detailed description of risk factors that may affect
our operating results can be found in Part 1, Item 1A, Risk
Factors, of our Annual Report on Form 10-K for fiscal year 2024,
and in the filings we make with the SEC from time to time. We
undertake no obligation to update any forward-looking statements,
except as otherwise required by law.
No Offer or Solicitation
This communication is neither an offer to sell, nor a
solicitation of an offer to buy any securities, the solicitation of
any vote, consent or approval in any jurisdiction pursuant to or in
connection with the Transaction or otherwise, nor shall there be
any sale, issuance or transfer of securities in any jurisdiction in
contravention of applicable law. No offer of securities shall be
made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act of 1933, as amended, and otherwise
in accordance with applicable law.
Additional Information and Where to Find It
These materials may be deemed to be solicitation material in
respect of the Transaction. In connection with the Transaction,
Revelyst, a subsidiary of Vista Outdoor, filed with the SEC a
registration statement on Form S-4 in connection with the proposed
issuance of shares of common stock of Revelyst to Vista Outdoor
stockholders pursuant to the Transaction, which Form S-4 includes a
proxy statement of Vista Outdoor that also constitutes a prospectus
of Revelyst (the “proxy statement/prospectus”). INVESTORS AND
STOCKHOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH
THE SEC, INCLUDING OUR PROXY STATEMENT/PROSPECTUS, BECAUSE THEY
CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND THE PARTIES
TO THE TRANSACTION. The registration statement was declared
effective by the SEC on March 22, 2024, and we have mailed the
definitive proxy statement/prospectus to each of our stockholders
entitled to vote at the meeting relating to the approval of the
Transaction. Investors and stockholders may obtain the proxy
statement/prospectus and any other documents free of charge through
the SEC’s website at www.sec.gov. Copies of the documents filed
with the SEC by Vista Outdoor are available free of charge on our
website at www.vistaoutdoor.com.
Participants in Solicitation
Vista Outdoor, Revelyst, CSG Elevate II Inc., CSG Elevate III
Inc. and CZECHOSLOVAK GROUP a.s. and their respective directors,
executive officers and certain other members of management and
employees, under SEC rules, may be deemed to be “participants” in
the solicitation of proxies from our stockholders in respect of the
Transaction. Information about our directors and executive officers
is set forth in our proxy statement on Schedule 14A for our 2023
Annual Meeting of Stockholders, which was filed with the SEC on
June 12, 2023, and subsequent statements of changes in beneficial
ownership on file with the SEC. These documents are available free
of charge through the SEC’s website at www.sec.gov. Additional
information regarding the interests of potential participants in
the solicitation of proxies in connection with the Transaction,
which may, in some cases, be different than those of our
stockholders generally, is also included in the proxy
statement/prospectus relating to the Transaction.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240711574044/en/
Investor Contact:
Tyler Lindwall Phone: 612-704-0147 Email:
investor.relations@vistaoutdoor.com
Media Contact:
Eric Smith Phone: 720-772-0877 Email:
media.relations@vistaoutdoor.com
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