Vista Outdoor Rejects MNC Capital Offer, To Close with CSG this Month

MNC Capital’s latest unsolicited buyout offer for Vista Outdoor isn’t going to get the job done. The Camp Chef parent company has rejected their offer and appears poised to close a transaction with the Czechoslovak Group (CSG) very soon.

MNC Capital’s Latest Offer

MNC Capital upped their offer recently to $3.2 billion in a bid to acquire Vista Outdoor and take it private. They claimed it was a superior offer for the business and that the offer had secured financing.

Once again, Vista saw it differently. For largely the same reasons that have been given with every offer, they feel that it undervalues the Revelyst business, and that the cash behind it wasn’t secured. Below are the reasons given in Vista’s press release.

• Inferior Stockholder Value: MNC is using Vista Outdoor’s own cash generation to fund its increased proposals. The value to Vista Outdoor stockholders of the CSG Transaction has actually improved over time relative to MNC by approximately $1.75 per share.
• Fundamentally Undervalues Revelyst: MNC’s Final Indication does not take into account the significant projected EBITDA expansion at Revelyst under new management or the ability for Vista Outdoor stockholders to realize a potential change of control premium for Revelyst in the future.
• Multiple Months to Close: A transaction with MNC would take multiple months to close. MNC has never completed a transaction, its financing includes new debt and equity partners relative to its prior offers and the MNC Final Indication remains subject to additional due diligence.
• Opportunistic Proposal to Capture Revelyst Upside: The Board is always open to opportunities to maximize stockholder value and may consider pursuing a change of control transaction for Revelyst at the appropriate time and at the appropriate valuation – but the Board believes that the MNC Final Indication significantly undervalues Revelyst and that MNC is seeking to capture, outside of a sale process and at a significant discount, the value of Revelyst which under the CSG Transaction would remain with Vista Outdoor stockholders.
• Inadequate Consideration: Each of Vista Outdoor’s financial advisors has delivered an opinion as to the inadequacy, from a financial point of view, of the MNC Final Indication to the holders of Vista Outdoor’s common stock.

Regarding the sources of the funds, there would be added risk for Vista if they took MNC’s deal. While MNC had commitments for the money, it appears to be subject to additional diligence. That means that the lender(s) for the money could review Vista’s business after the deal is signed and then decide they weren’t going to fund it anymore.

CSG Offer

With MNC’s final offer gone, Vista is set to close a deal with CSG. Unlike the MNC deal for all of Vista, the deal with CSG would be for just Vista’s Kinetic Group and the Revelyst division would then be a public company.

Possibly in light of the additional offers, CSG has upped their offer an additional $100 million to $2.1 billion. $250 million of the proceeds would go to Revelyst to fund growth of the basket of brands. Hopefully we’ll see a good chunk of that money go to Camp Chef for continued innovation.

It’s seemed likely that Vista was going to close the deal with CSG throughout this process. They received government approval already, which was the biggest hurdle standing in the way.

The biggest news regarding the transaction for me is that they plan to close the deal this month. Vista has always said that the transaction would close in 2024 but has now said it will be July 2024. It will be great for this process to be over sooner rather than later.