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ANOKA, Minn. - Vista Outdoor Inc . (NYSE: NYSE:VSTO), a leading global designer, manufacturer, and marketer of outdoor sports and recreation products, has called on its shareholders to vote in favor of a proposed transaction with Czechoslovak Group a.s. (CSG) during a special meeting scheduled for September 27. The board of directors has unanimously recommended the approval of the acquisition of The Kinetic Group and an investment in Revelyst, which they believe will maximize shareholder value.
The transaction includes a cash consideration of $28 per share and one share of Revelyst common stock for each share of Vista Outdoor common stock held. The deal, expected to close in October 2024, subject to shareholder approval and other customary closing conditions, is positioned as a superior alternative to a previous proposal from MNC Capital that the board feels significantly undervalues the company.
Vista Outdoor's board asserts that the CSG transaction offers immediate value for The Kinetic Group and allows shareholders to retain the potential for further gains through Revelyst, which is anticipated to experience a substantial increase in its Adjusted EBITDA and achieve a run-rate cost savings of $100 million by fiscal year 2027.
The board is actively exploring additional opportunities to enhance Revelyst's value, including discussions with private equity firms separate from MNC Capital, indicating a willingness to consider any offers that may deliver greater shareholder value.
Vista Outdoor's brands encompass a wide range of performance-driven, high-quality, and innovative products in the outdoor sports and recreation markets. The company's portfolio includes well-known names such as Bushnell, CamelBak, and Federal Ammunition.
The board's recommendation comes with a sense of urgency, as the merger agreement with CSG can be terminated after October 15th without shareholder approval. The board's letter emphasizes the importance of shareholder votes to secure the transaction's benefits.
This news is based on a press release statement from Vista Outdoor Inc. and reflects the company's current plans and expectations regarding the proposed transaction with CSG.
In other recent news, Vista Outdoor Inc. has been involved in a series of strategic maneuvers. The company's Board of Directors has recommended a transaction with Czechoslovak Group a.s. (CSG) for the acquisition of The Kinetic Group and investment in Revelyst over a proposal by MNC Capital. The deal with CSG values The Kinetic Group at approximately $2.15 billion and includes the sale of a 7.5% stake in Revelyst for $150 million.
Roth/MKM has downgraded Vista Outdoor's stock from Buy to Neutral, setting a price target of $42.00. The firm acknowledged potential long-term value in Vista Outdoor's Revelyst shares, which could generate approximately $195 million in standalone adjusted EBITDA, implying a value of over $26 per share.
In other developments, Vista Outdoor reported a 7.1% decrease in total sales to $644.2 million and a 6.5% decline in earnings per share to $1.01. However, Revelyst is expected to double its Adjusted EBITDA sequentially for the quarter and the year.
Finally, Vista Outdoor has approved transaction incentive awards for two of its top executives, Jason Vanderbrink and Eric Nyman. The company's board of directors has been re-elected, and the compensation of the company's executive officers for fiscal year 2024 has been approved. These are the recent developments in Vista Outdoor Inc.'s operations.
InvestingPro Insights
As Vista Outdoor Inc. (NYSE: VSTO) navigates through the proposed acquisition of The Kinetic Group and investment in Revelyst, the company's financial health and market performance remain critical factors for shareholders. According to InvestingPro data, Vista Outdoor currently holds a market capitalization of approximately $2.3 billion. Despite a challenging period with a reported revenue decline of 9.21% in the last twelve months as of Q1 2023, the company has demonstrated resilience with a strong return of 17.37% over the last three months.
InvestingPro Tips suggest that Vista Outdoor's net income is expected to grow this year, which could signal a positive outlook for the company post-acquisition. Moreover, analysts predict that the company will be profitable this year, aligning with the board's confidence in the transaction's potential to maximize shareholder value. It's worth noting that while the company does not pay dividends, it has been trading near its 52-week high, indicating a robust market confidence.
For investors looking for more in-depth analysis, there are additional InvestingPro Tips available on the platform. These tips provide a comprehensive look at Vista Outdoor's financials, including insights on shareholder yield and the company's ability to meet short-term obligations with its liquid assets. Interested shareholders can explore these additional tips to make more informed decisions regarding their investment in Vista Outdoor.
With the upcoming special meeting and the board's unanimous recommendation to approve the CSG transaction, these InvestingPro Insights offer a glimpse into the financial nuances that could influence the deal's outcome and Vista Outdoor's future trajectory.
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