Fox Racing Complements Vista Outdoor's Existing Brand Portfolio, Expands Leadership Positions in Helmets, Protective Gear and Apparel for Motocross and Mountain Biking
Acquisition Strengthens Outdoor Products Segment, Adds Approximately $350 Million in Revenue
ANOKA, Minn., Aug. 8, 2022 /PRNewswire/ -- Vista Outdoor Inc. (NYSE: VSTO), the parent company of 40 renowned brands that design, manufacture and market sporting and outdoor products to consumers around the globe, today announced the closing of its acquisition of Irvine, Calif.-based Fox Racing for the purchase price of $540 million, with the potential for an additional $50 million earnout based on Fox Racing's financial performance. The addition of Fox Racing, a global icon in performance motocross, mountain bike and lifestyle gear for adventure seekers, allows Vista Outdoor to add yet another category-leading brand to its portfolio while maintaining a strong balance sheet and reinvesting in its existing business to drive organic growth.
"We are excited to welcome Fox Racing to the Vista Outdoor family," said Chris Metz, Chief Executive Officer, Vista Outdoor. "This legendary brand brings us into one of the most passionate sporting bases with motocross and expands our footprint in mountain biking. Fox Racing is synergistic to our existing action sports business unit, which includes Bell Helmets, Giro, Blackburn, Krash, Copilot and Raskullz. The addition of Fox Racing to our portfolio will allow us to target multiple consumer demographics across mountain and road biking, skiing/snowboarding and powersports. With the Fox Racing acquisition now closed, and the planned acquisition of Simms Fishing Products announced, we're continuing the successful implementation of our strategy to use accretive acquisitions to expand leadership positions across categories, while enhancing our ability to capitalize on long-term growth opportunities in outdoor recreation."
For 50 years, Fox Racing has been a leading voice in the motocross and adventure community, with a dedicated consumer following and talented group of employees that embody the brand's mission to "honor yesterday, conquer today, and invent tomorrow." Fox Racing's deep history of producing innovative gear that enables racers and explorers to reach new heights aligns perfectly with Vista Outdoor's existing portfolio of leading outdoor brands. Fox Racing grew net sales by a compound annual growth rate of approximately 20 percent from calendar year 2019 to 2021 and is expected to grow another roughly 20 percent in calendar year 2022.
Jeffrey McGuane, CEO of Fox Racing, continues to lead the brand along with current members of Fox Racing's leadership team. Fox Racing is now part of Vista Outdoor's Outdoor Products segment and will be included in the new Outdoor Products Company upon completion of the previously announced separation.
Details on the Transaction
Vista Outdoor paid a gross purchase price of $540 million, subject to certain customary closing adjustments and not including contingent incentives of up to $50 million, upon the achievement of certain EBITDA targets. For calendar year 2022, Fox Racing's full-year net sales and adjusted EBITDA are expected to be approximately $350 million and $55 million, respectively. Vista Outdoor expects the transaction to be immediately accretive to earnings, excluding transaction costs, transition costs and inventory step-up.
Vista Outdoor financed this acquisition through a combination of a $600 million asset-based revolving credit facility, which will replace Vista Outdoor's existing asset-based revolving credit facility, and a $350 million secured term loan facility. Vista Outdoor's leverage ratio remains well within the target leverage ratio of one to two times.
About Fox Racing
Since 1974, when Geoff Fox first introduced the world to our iconic logo, Fox Racing has been all about family. Not just in name—a legacy that continues to this day—but the idea of celebrating and sharing the passion of life on two wheels with the world. This is what drives us, inspires us, and keeps us close. Because "skulk" is more than just a word for a family of foxes—it's the adventure, the fidelity of friends, and everything that happens along the way.
About Vista Outdoor Inc.
Vista Outdoor (NYSE: VSTO) is the parent company of more than three dozen renowned brands that design, manufacture and market sporting and outdoor products. We serve a broad and diverse range of consumers around the globe, including outdoor enthusiasts, golfers, cyclists, backyard grillers, campers, hunters, recreational shooters, athletes, as well as law enforcement and military professionals. Our reporting segments, Outdoor Products and Sporting Products, provide these consumers with a wide range of performance-driven, high-quality and innovative outdoor and sporting products. Our operating model leverages shared resources across brands to achieve levels of excellence and performance that would be out of reach for any one brand on its own. Brands include Remington Ammunition, Bushnell, CamelBak, Bushnell Golf, Foresight Sports, Fox Racing, Bell Helmets, Camp Chef, Giro, QuietKat, Stone Glacier, Federal Ammunition and more. Vista Outdoor products are sold at leading retailers and distributors across North America and worldwide. For news and information, visit our website at www.vistaoutdoor.com.
Forward-Looking Statements
Some of the statements made and information contained in this report, excluding historical information, are "forward-looking statements," including those that discuss, among other things: our plans, objectives, expectations, intentions, strategies, goals, outlook or other non-historical matters; projections with respect to future revenues, income, earnings per share or other financial measures for Vista Outdoor; and the assumptions that underlie these matters. The words "believe," "expect," "anticipate," "intend," "aim," "should" and similar expressions are intended to identify such forward-looking statements. To the extent that any such information is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities Litigation Reform Act of 1995. Numerous risks, uncertainties and other factors could cause our actual results to differ materially from the expectations described in such forward-looking statements, including the following: supplier capacity constraints, production or shipping disruptions or quality or price issues affecting our operating costs; the supply, availability and costs of raw materials and components; increases in commodity, energy, and production costs; seasonality and weather conditions; our ability to complete acquisitions, realize expected benefits from acquisitions and integrate acquired businesses; reductions in or unexpected changes in or our inability to accurately forecast demand for ammunition, accessories, or other outdoor sports and recreation products; disruption in the service or significant increase in the cost of our primary delivery and shipping services for our products and components or a significant disruption at shipping ports; risks associated with diversification into new international and commercial markets, including regulatory compliance; our ability to take advantage of growth opportunities in international and commercial markets; our ability to obtain and maintain licenses to third-party technology; our ability to attract and retain key personnel; disruptions caused by catastrophic events; risks associated with our sales to significant retail customers, including unexpected cancellations, delays, and other changes to purchase orders; our competitive environment; our ability to adapt our products to changes in technology, the marketplace and customer preferences, including our ability to respond to shifting preferences of the end consumer from brick and mortar retail to online retail; our ability to maintain and enhance brand recognition and reputation; others' use of social media to disseminate negative commentary about us, our products, and boycotts; the outcome of contingencies, including with respect to litigation and other proceedings relating to intellectual property, product liability, warranty liability, personal injury, and environmental remediation; our ability to comply with extensive federal, state and international laws, rules and regulations; changes in laws, rules and regulations relating to our business, such as federal and state ammunition regulations; risks associated with cybersecurity and other industrial and physical security threats; interest rate risk; changes in the current tariff structures; changes in tax rules or pronouncements; capital market volatility and the availability of financing; foreign currency exchange rates and fluctuations in those rates; general economic and business conditions in the United States and our markets outside the United States, including the war in Ukraine and the imposition of sanctions on Russia, conditions affecting employment levels, consumer confidence and spending, conditions in the retail environment, and other economic conditions affecting demand for our products and the financial health of our customers; and risks related to our Planned Separation. You are cautioned not to place undue reliance on any forward-looking statements we make. A more detailed description of risk factors that may affect our operating results can be found in Part 1, Item 1A, Risk Factors, of our Annual Report on Form 10-K for fiscal year 2022 and in the filings we make with Securities and Exchange Commission (the "SEC") from time to time. We undertake no obligation to update any forward-looking statements, except as otherwise required by law.
View original content to download multimedia:https://www.prnewswire.com/news-releases/vista-outdoor-announces-closing-of-the-acquisition-of-fox-racing-301601121.html
SOURCE Vista Outdoor Inc.
