It Looks Like the Battle Over Vista’s Ammunition Businesses is Over

It took a $100 million bump in the sales price, but it appears Czechoslovak Group (CSG) has finally gotten the final endorsement of Vista Outdoor Board of Directors to proceed with the acquisition of Vista’s Kinetic Group. The final price for the ammunition division (The Kinetic Group) of Vista works out to $21/per share -in cash- for Vista shareholders.

That $3 per share price bump brings the total purchase price to $2.1 billion. That’s a lot of ammunition and components. It’s also the end of an ongoing battle for ownership of the Kinetic Group that pitted CSG against MNC Capital.

As Vista’s announcement reads, MNC’s attempt at intervening and besting the CSG deal failed despite Vista having provided MNC “access to approximately 4,900 documents, answered over 1,500 data requests, held over 35 meetings or calls, gave extensive access to the management team and supported multiple site tours.”

Despite all that, MNC’s “Final Indication” was judged to “significantly undervalue Vista Outdoors as a whole and especially the Revelyst business.” Revelyst, FYI, is the remaining pieces of Vista and includes Bushnell, CamelBak, Bushnell Golf, Foresight Sports, Fox Racing, Bell Helmets, Camp Chef, Giro, Simms Fishing, QuietKat, Stone Glacier and probably others I’ve missed.

Post acquisition, Revelyst will become a free-standing business. In addition to the $21 per share cash payment, Vista shareholders will receive one share of Revelyst common stock share per share of Vista Outdoor common stock.

So….with the CIFIUS and the Vista Board of Directors still onboard, it looks like the only obstacle remaining is the formality of a virtual shareholders meeting on July 23, 2024.

Despite all the furor on the Vista Outdoor side of the deal, David Stepan, CEO of CSG Ammo+ has taken the whole process in stride. When contacted yesterday following the announcement, I was told CSG officials were “optimistic about this relationship moving forward.”

The movement Stepan refers to isn’t any sort of physical movement of the companies being acquired. CSG officials have repeatedly stated they aren’t in the business of moving American companies. Instead, the Kinetic Group will join Fiocchi of America as part of CSG’s Ammo+ Division, focusing on small caliber ammunition.

It’s important to note that CSG is not the owner of Fiocchi of America. Fiocchi of America is owned by Fiocchi Munition, and CSG is a 70% owner of that company.

What’s been surprising about the furor over the sale is the insistence of opponents of the sale that the sale of a U.S. ammunition company would be bad for the United States and potentially damaging to law enforcement ammunition supplies. That completely ignores the fact that Fiocchi – an Italian company – has done business directly with Homeland Security or that PMC, a South Korean ammo maker, sells to law enforcement in the U.S. via FieldUSA.com, a law enforcement-only distributor.

What’s largely been ignored is the impact the whole sale/bifurcation/divestiture has had on Vista employees. Closures of former company offices have disrupted jobs, changed career trajectories and generally introduced turmoil into workers’ lives.

This latest development – divestiture from the Vista umbrella – will be still more new territory for many of the Remington, CCI, Speer and Federal brand managers to navigate. Their corporate hierarchy will undoubtedly face some changes, but Stepan has been quoted in European media as saying their priorities will remain “the United States commercial markets”, although he says he’s “convinced Remington and Federal will be able to successfully compete in EU and other markets as well.

It will be interesting to see how CSG moves forward. As a company with a wide portfolio of products, from wristwatches and vehicles to artillery shells, they’ll be incorporating their best practices into the equally well-established ammunition companies that will be added to their Ammo+ division.

As always, we’ll keep you posted.