The ongoing sale process of the Kinetic Group by Vista Outdoor has taken another turn. The vote for the sale to CSG was underway, but likely due to mounting pressure from shareholders, Vista Outdoor has decided to stop the sale and evaluate additional strategic options.
It sounds like everything is on the table for the outdoor brand holding company. We’re interested to see where Camp Chef, under the Revelyst side of the business, will end up. The strategic options include the following, from a press release on the matter.
- Exploration of a full range of alternatives for Revelyst, including a potential sale of Revelyst. The Czechoslovak Group a.s. (“CSG”) is also considering an acquisition of Revelyst with potential partners (in addition to its proposed acquisition of The Kinetic Group).
- Engagement with MNC Capital (“MNC”) and its private equity partner with respect to its proposal to acquire Vista Outdoor to see if it can deliver superior value for the Company’s stockholders. This follows MNC’s recent public statement on July 26, 2024 that “if there were a reason or basis to increase our offer, including Vista engaging with us and providing one, we would increase our offer price”. In light of this recent statement, the Board has determined that MNC’s proposal would reasonably be expected to lead to a superior proposal and meets the standard for engagement under the terms of the CSG merger agreement. Considering the extensive diligence conducted by MNC and its private equity partner to date, Vista Outdoor expects MNC to be able to confirm an increased proposal for the acquisition of Vista Outdoor in short order.
- Continued consideration of the separation of Revelyst and The Kinetic Group through a spin-off.
An option that’s not on the list, but one they likely could be exploring, is a sale of individual brands. They probably have an idea of the value of each of the brands individually and have done a sum of the parts valuation, which is just what it sounds like. Value each brand individually on the private market, sum that value, and that’s the value of the whole company.
If you’re looking to optimize value while exploring a sale, it could be selling off every brand, then the last person turns the lights off. It also could be selling off ones that will fetch a higher price through divestiture than they would as a part of the whole company via stock price or private sale.
We recognize the continuing support received from many of our stockholders for the CSG transaction and the feedback from some of our stockholders with respect to other strategic alternatives. We take the views of our stockholders very seriously and believe it is prudent to evaluate all strategic alternatives. In addition to engaging with CSG and MNC and its private equity partner, we also look forward to reviewing any other strategic alternative for Vista Outdoor that would maximize value for stockholders. While we conduct this strategic review, we remain as focused as ever on delivering high-quality, innovative products for our consumers around the world.
Mike Callahan, Chairman of the Board of Directors
The shareholder meeting that was supposed to be happening today on the sale to CSG has been pushed to September 13th. In the meantime, Vista’s next earnings call is scheduled for August 6th, which should yield some interesting information.