MNC Capital Submits Proposal To Acquire Vista Outdoor For $35.00/Share In Cash

Author: Benzinga Newsdesk | March 01, 2024 10:44am

Dear Michael:

We are writing to express our strong interest in acquiring all the outstanding shares of Vista Outdoor Inc. ("Vista" or the "Company") for a purchase price per share of $35.00 in cash (the "Transaction"). This proposed transaction is materially superior to the October 16, 2023 publicly announced sale of the Company's Sporting Products division, The Kinetic Group, to CZECHOSLOVAK GROUP a.s., and the separation of the Company's Outdoor Products division, Revelyst, Inc., into a public company. The Transaction would allow the Sporting Products business and its critical national security assets to remain under U.S. ownership and would create value certainty and enhanced sponsorship for the Outdoor Products business. The proposed price offers a substantial premium to Vista's share price, which already reflects a takeover premium. Given Vista's share price is currently trading close to its 52-week high, our proposal also reflects a highly attractive value overall to Vista's shareholders.

Key considerations of our proposal include:

• All-cash: All-cash acquisition for 100% of the Company.
• Regulatory Considerations: No regulatory risk and no Committee on Foreign Investment in the United States ("CFIUS") review; unlike the current proposed transaction for the Sporting Products business.
• Sporting Products: The Sporting Products business is a national asset, evidenced by its significant ammunition and primer manufacturing capabilities and its key role in refilling the U.S. Defense Department and local law enforcement stockpiles. These capabilities are even more important today, given U.S. ammunition shortages and increasing demand from U.S. and NATO allies abroad. This transaction would allow the business to stay American-owned with a long-term U.S. owner who is aligned with the interests of America's national security and consumers; and no need for CFIUS review. As you are aware, this view has been publicly expressed by public officials including a former United States Secretary of State. We are proud to represent an American alternative to the currently contemplated sale to a foreign entity.
• Outdoor Products: The announced divestiture of the Sporting Products business provides limited liquidity and certainty to public Vista shareholders, leaving Outdoor Products as a subscale public company undergoing a critical multi-year turnaround plan. We strongly believe the next stage of Outdoor Products' growth and development is best pursued and accelerated as a private company.

Before turning to specific elements of our proposal, it is important to note that we at MNC Capital ("MNC") have long followed, and care deeply about being the best steward of Vista's entire portfolio of leading brands. We are excited to pursue the offer described below to acquire the Company, which provides the Company's shareholders with a very attractive valuation for the business as well as a high degree of speed and certainty to consummate the Transaction. The Transaction would allow the Company's public shareholders to de-risk their investment and obtain immediate liquidity at a considerable premium.

We take very seriously the time, effort, and trust that all parties have invested to date in facilitating our due diligence of the Sporting Products business. These past efforts allow us to submit this letter with the intention to conduct expedited due diligence on the Outdoor Products segment only.

Acquisition Price

Subject to confirmatory due diligence, we are proposing a purchase price of $35.00 a share. Our valuation assumes total fully diluted shares of the Company as disclosed in its most recent public filings. 1

Financing

Our agreement would not be subject to any financing contingency. Our financial advisor stands ready to take you through the details of our financing.

Timing

MNC and its capital sources invested significant time and resources to complete due diligence of the Sporting Products segment in the Fall of 2023 alongside the work of its third-party advisors: FTI Consulting, Stax, Kirkland & Ellis, Marsh, Mercer, B Riley, Timberwolf Environmental and Stephens Inc. We have also now performed extensive outside-in diligence on the Outdoor Products business with all publicly available data and information and the support of several additional third-party advisors who we stand ready to introduce. We are prepared to devote substantial internal and external resources to move expeditiously towards the signing of a definitive agreement after finalizing our confirmatory diligence.

MNC's interest in the Transaction, the existence of this letter, and its contacts are confidential, should not be disclosed without our prior written consent and should be treated in accordance with our existing confidentiality agreement. As is customary, the Proposal is not, and is not intended to be, a binding commitment or agreement. It also does not and is not intended to impose any legal or public disclosure obligations on any party but is merely a statement of MNC's present desire to further discuss the Transaction with Vista's board of directors.

We believe the proposed valuation and our ability to close produce both greater certainty and materially higher value than current alternatives being considered by the Company's Board of Directors.

We are excited by the prospect of working expeditiously with the company and its advisors towards a transaction. Please feel free to contact Marshall McKissack at Stephens Inc. at mmckissack@stephens.com if you have any questions regarding the offer.

Sincerely, 

Mark Gottfredson 

MNC Capital

Posted In: VSTO