Vista Outdoor (VSTO +10%) has concluded a prolonged bidding war by agreeing to sell Revelyst to Strategic Value Partners (SVP, Financial) for $1.125 billion. Additionally, the company announced an amended agreement with Czechoslovak Group (CSG, Financial) to sell The Kinetic Group business for $2.225 billion, up from the previous offers of $2.15 billion and $2.10 billion. The SVP deal is contingent on the completion of the transaction with CSG.
VSTO has been a focal point of mergers and acquisitions since May 2022, when it began restructuring by separating its Outdoor Products and Sporting Products into two public entities. The stock faced a downturn until it announced a sale of its Sporting Products business to CSG for $1.91 billion.
Since then, VSTO's stock has been on the rise, buoyed by developments such as an unsolicited takeover bid from Colt CZ Group at $30 per share in November 2023. Offers escalated, with MNC Capital Partners proposing $35 per share, eventually increasing to $43 per share last month.
- VSTO has consistently expressed its dedication to exploring strategic alternatives for its Revelyst brand, which includes various outdoor and adventure sporting goods brands, contributing nearly 50% of its FY23 revenue.
- The announcement of the sale wasn't the main reason for today's stock surge. Instead, the sale price for Revelyst and the higher offer from CSG are what excite investors.
- Following the agreement, VSTO shareholders will receive $45 per share in cash, surpassing the $43 per share offered by MNC.
This year has seen significant volatility as various parties bid to acquire VSTO either wholly or in parts. A bidding war between MNC and CSG, along with management's cautious approach, maintained uncertainty. However, today's agreement with SVP suggests a resolution may be near. MNC might still increase its offer, but given VSTO's past dealings with CSG, it seems likely that VSTO will focus on closing the merger with CSG, leading to the completion of the SVP deal by January 2025.
