Investor bids for Remington parent
Vista Outdoor, the parent company of Lonoke-based Remington Ammunition, confirmed Friday that it has received an unsolicited indication of interest from MNC Capital Partners to acquire Vista in an all-cash deal.
Texas-based MNC offered $35 per share, putting the proposed deal’s value at $2.9 billion. Vista Outdoor shares jumped on the news and closed at $33.23, up $2.03 or about 6% in trading Friday. News of the deal was initially reported by The Wall Street Journal.
In October, privately held Czech Republicbased Czechoslovak Group, known as CSG, said it would acquire Vista Outdoor’s Sporting Products business — which encompasses its ammunition production and sales and is now referred to as The Kinetic Group — in a cash deal valued at $1.91 billion. When and if the deal closes sometime this year, The Kinetic Group would become a wholly owned subsidiary of CSG, and plans are for its U.S. headquarters to remain in Anoka, Minn.
In a statement Friday, Vista Outdoor said, “Vista Outdoor’s Board of Directors has not made any determination with respect to the MNC Indication within the framework contemplated by the existing merger agreement with CSG, which remains in effect, nor has it changed its recommendation in support of the acquisition of its Sporting Products business by CSG.”
The company said its board is reviewing the MNC plan, as well as consulting with its financial and legal team, and that Vista Outdoor remains committed to acting in the best interest of its shareholders.
Vista Outdoor employs about 4,000 workers across its ammunition brands, which include CCI, Federal, HEVI-Shot, Remington and Speer. Remington Ammunition employs a little more than 1,000 workers in Arkansas at last count. In May
of 2022, Vista Outdoor said it would spin off its Sporting Products segment and its Outdoor Products segment into two companies. Its outdoor segment is now called Revelyst.
Tomas Jandik, professor of finance and the Dillard’s Chair in Corporate Finance at the University of Arkansas, Fayetteville’s Sam M. Walton College of Business, said in an interview Friday the offer from MNC comes at a substantial premium, and having two companies vying for Vista Outdoor makes it more likely one will succeed. He said he believed the best outcome would be the spin-off of the ammunition brands into their own entity, though it was unclear if MNC intended to do that or keep the company intact, if it successfully acquires Vista Outdoor.
In a letter to Vista Outdoor’s Board dated Feb. 19 detailing the offer, MNC Capital said, in part, “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.”
In a letter dated Feb. 26, Vista Outdoor said it would review MNC’s offer. A letter dated Feb. 28 from MNC reiterated the company’s strong interest in acquiring Vista Outdoor.
In late January, Sen. J.D. Vance, a Republican from Ohio, sent a letter to Treasury Secretary Janet Yellen and the Committee on Foreign Investment in the United States (CFIUS) requesting an investigation into the sale of Vista Outdoor’s ammunition business to CSG on national security grounds, contending that CSG was linked to the inner circle of Russian President Vladimir Putin.
When asked at the time for comment via email about Vance’s letter, a Vista Outdoor spokesman said, “Vista Outdoor has voluntarily filed the transaction with CFIUS and is already working with CFIUS toward a comprehensive review. This transaction will allow us to grow the reach of our iconic American brands and expand our legacy of U.S. manufacturer support for the military and law enforcement customers and investments in conservation and our hunting and shooting heritage.”
Minnesota-based Vista Outdoor formed in 2015 and now is made up of 41 outdoor brands, including bicycles, camping gear, golf and skiing equipment, optics and ammunition makers. It purchased Remington Ammunition out of bankruptcy in late 2020. Remington was founded in 1816 and began production at the Lonoke facility in 1969. The operation includes more than 750,000 square feet of manufacturing space on 1,200 acres.