Story Stocks^®

Vista Outdoor (VSTO +10%) closes the door on a lengthy bidding war today after agreeing to sell Revelyst to Strategic Value Partners, or SVP, for $1.125 bln. The outdoor sports and recreation manufacturer also announced that it amended its previously announced agreement with Czechoslovak Group, or CSG, to sell The Kinetic Group business for $2.225 bln, up from an already increased offer of $2.15 bln and the original $2.10 bln price. The deal with SVP is contingent upon closing the transaction with CSG.

VSTO has been the center of M&A talks since initiating a restructuring in May 2022, separating its Outdoor Products and Sporting Products segments into two publicly traded entities. Investors immediately gave VSTO the cold shoulder, igniting an extended correction that bottomed out on news that VSTO found a buyer for its Sporting Products business, agreeing to sell it to CSG for $1.91 bln.

Since then, the stock has been steadily climbing, supported by several uplifting developments, starting with an unsolicited takeover proposal from Colt CZ Group at $30.00 per share in November 2023. The offers only went up from there, with MNC Capital Partners proposing $35/share and ultimately bumping this up to $43/share last month.

• VSTO commented multiple times over the past several months about its commitment to exploring strategic alternatives for its Revelyst banner, which encompasses numerous brands focused on outdoor and adventure sporting goods. Revelyst also comprises the other half of VSTO's overall operations, contributing nearly 50% of its FY23 revenue.
• As such, today's announcement of a sale was not so much the underlying driver of today's upward price action. Rather, the dollar amount received for the sale of Revelyst and the higher offer from CSG excites investors.
• The reason is that following today's agreement, VSTO would receive more than it would have if it had agreed to the deal with MNC Capital Partners. At the closing of the CSG deal, when combining the prices paid between CSG and SVP, VSTO shareholders receive $45.00 per share in cash instead of the $43.00 offered by MNC.

There were many ups and downs this year as multiple agents bid to either acquire VSTO outright or take it in pieces. A bidding war erupting between MNC and CSG combined with management not overly eager to accept a deal kept uncertainty elevated for an extended period. However, following today's agreement with SVP, a resolution appears to have finally come to pass. MNC could still hike its offer, possibly adding a wrinkle to the story. Still, given VSTO's history with CSG regarding its Sporting Product business, it seems more likely it will remain steadfast in closing its previously announced merger with CSG, which would result in the closing of today's SVP deal, expected in January 2025.