CSG touts offer for Vista assets

A Czech firearms-maker in the running to buy Vista Outdoor’s ammunition division, including Arkansas-based Remington Ammunition, says its $1.9 billion offer is still the best one on the table.

The Czechoslovak Group, known as CSG, said in a Monday release its offer for Vista Outdoor’s ammo makers is fully financed by JPMorgan Chase, noting that CSG has been a significant supplier to NATO and works with defense companies in the United States. The company said that it already operates ammunition companies in the U.S., in Little Rock and in Missouri.

CSG faces a rival in its acquisition efforts, with Texas-based MNC Capital Partners currently making an offer to purchase all of Vista Outdoor for $3 billion or $37.50 per share. MNC, and others, have said Vista Outdoor’s ammunition makers should not be sold to a foreign-owned company.

Shares of Vista Outdoor closed at $33.62 on Monday, up 18 cents or less than 1%. Shares have traded as low as $23.33 and as high as $33.96 over the past year.

The most recent offer from MNC came after, in mid-March, Vista Outdoor rejected MNC’s all-cash offer valued at $2.9 billion. At the time, Vista Outdoor said the offer undervalued the company’s outdoor products division in particular and that its board continued to recommend the acquisition of the company’s sporting products division by CSG.

Tomas Jandik, professor of finance and the Dillard’s Chair in Corporate Finance at the University of Arkansas’ Walton College of Business in Fayetteville, has said whichever company ends up on top, spinning off the ammunition brands just makes good sense, as the customer base and the management needs of the ammo brands tends to differ significantly from Vista’s other outdoor offerings like bicycles and skiing gear.

In a phone interview Monday afternoon, he said CSG’s statement reads like a checklist of reasons why the deal should pass muster from the U.S. government. He noted the company’s statement points out CSG is based in a friendly country and is already doing business

with American companies, and is determined to keep the U.S. operations autonomous and local management in place if the deal is approved.

He said Vista management has some reasons to favor the SCG deal even though the MNC’s offer is clearly competitive — primarily, their jobs are more secure in that scenario.

Jandik said another factor looming over the deal is the potential of hefty breakup fees if the deal falls through for any number of reasons, including failure to obtain approval.

In October, CSG said it would acquire Vista Outdoor’s sporting products business — which encompasses Vista’s ammunition production and sales operations, now known as The Kinetic Group — in a cash deal. Vista Outdoor employs about 4,000 workers across its ammunition brands, which include CCI, Federal, HEVI-Shot, Remington and Speer. Lonoke-based Remington Ammunition employs a little more than 1,000 workers in Arkansas at last count.

Sen. J.D. Vance, a Republican from Ohio and most recently Representative Clay Higgins, a Republican and a member of the House Homeland Security Committee, have sent letters to Janet Yellen, secretary of the Treasury and chair of the Committee on Foreign Investment, requesting a close look at the sale of Vista Outdoor’s ammunition business to CSG on national security grounds, contending, among other things, CSG was allegedly linked to America’s foreign adversaries.

In the Monday release, CSG disputed any connection to U.S. adversaries, including Russia or China.

“CSG is among the top providers of artillery ammunition for NATO and recently announced that we intend to invest several hundred million dollars more in our ongoing efforts to bolster Ukraine’s defense capabilities by expanding our supply of artillery ammunition, tanks and artillery systems to the country,” Andrej Cirtek, CSG’s spokesman said in the release. “Several of our companies hold top NATO security clearances and we work with U.S. defense companies. This would not be possible if we had ties to U.S. adversaries such as Russia or China.”

On March 28, Vista Outdoor said the companies have voluntarily withdrawn and refiled their notice to the Committee on Foreign Investment in the United States. The move allows more time to examine the proposed acquisition, according to a release.

When and if the deal passes regulatory approval, the sale would still have to be approved by shareholders. The deal is expected to close sometime in 2024. If it goes trough, The Kinetic Group would become a wholly owned subsidiary of privately held CSG and plans are for its U.S. headquarters to remain in Anoka, Minn.

In its Monday release, CSG said it’s committed to successfully closing on the acquisition and “becoming the steward of such venerable American brands as Federal, CCI and Remington.”

CSG reiterated it intends to keep The Kinetic Groups leadership in place and continue U.S. production.

In the U.S., CSG operates plants in Little Rock and Ozark, Mo. through Fiocchi of America, a division of Italy-based Fiocchi Munizioni. CSG acquired 70% majority ownership of Fiocchi Munizioni in 2022. CSG noted in its release, the deal passed muster with the Committee on Foreign Investment in the United States.

Fiocchi America employs about 300 workers at its two U.S. plants. The company said it has invested millions in its U.S. operations and is considering expanding capacity but noted Monday it is “revisiting plans and strategies” for brand new primer plant expansion in Little Rock valued at about $41 million that was announced by previous management.

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.