Vista Outdoor told Texas investment firm MNC Capital Partners that the board expects to respond to its $2.9 billion offer sometime next week.
MNC revealed Friday correspondence that took place last month with Vista Outdoor in which the investment firm offered $35 a share in cash for the business. The offer reflects more than a 17% premium over what Vista shares were trading at when MNC submitted its indication of interest.
The deal, if accepted, would keep Vista’s sporting goods and outdoor businesses under one ownership team instead of splitting the two as is the case under the current plans.
Vista already struck a $1.91 billion deal with Czechoslovak Group for its sporting products business and has plans to spin off the outdoor group as a public company called Revelyst.
Vista confirmed the offer Friday and said the board has not changed its stance on the Czechoslovak Group sale and is currently reviewing the MNC offer.
MNC’s Mark Gottfredson called the firm’s proposal “materially superior” to what Vista currently has planned for its businesses in a letter dated Feb. 19 to the board.
Gottfredson, a former Vista board member, went on to say that spinning off the outdoor business would create a “sub-scale public company,” amid a multi-year turnaround “best pursued and accelerated as a private company.”
Gottfredson said about as much in a follow-up letter to the board Wednesday saying financing for the deal would include $1.5 billion in equity and $1.4 billion in debt financing.
“Our offer represents a substantial premium to how the market is valuing, and will value, Revelyst – which lacks the scale to trade well as a standalone public company and will be better positioned to grow with private sponsorship,” Gottfredson wrote in his letter to the board sent Wednesday.
Current Plans and Consolidation
The move to create the standalone, outdoor-focused Revelyst business has so far led to office closures and layoffs as the business consolidates and prepares for the spinoff.
Fox headquarters in Irvine, California, has now become the hub for Revelyst’s Adventure Sports division, which is led by Jeff McGuane.
Last year, Bell and Giro moved to Fox’s offices. Last month, Vista said CamelBak, QuietKat Electric Bikes, Blackburn, and other brands would also relocate to Irvine.
Revelyst’s other business divisions also underwent their own office consolidations in what Revelyst CEO Eric Nyman said last month were moves to “grow and meet financial plans.”
The company did not specify how many jobs are impacted by the office changes.
Revelyst sales fell 10% to $317 million in the quarter ended Dec. 24, the most recent financial information available.
