Vista Outdoor said it would sell its sporting products business in a $1.91 billion deal, although its shares tumbled about 20% in early trading after it cut its full-year sales forecast.
The all-cash sale of the sporting products unit, which includes its guns and ammunition business, to privately held Czechoslovak Group a.s. (CSG) is expected to close next calendar year, Vista Outdoor said.
The outdoor recreation and shooting sports products maker also lowered its fiscal 2024 revenue forecast, citing tight consumer spending on its big-ticket discretionary goods in the face of higher interest rates.
“The reduction in sales from our previous guidance coupled with pricing and promotional pressures across our categories is driving down profitability,” said Vista’s CFO Andy Keegan.
Vista now expects revenue to range between $2.73 billion and $2.86 billion for the year ending March 2024, compared with its previous forecast of $2.85 billion to $2.95 billion.
Earlier this month, Vista spun off its outdoor products segment, which includes helmets and water bottles, into a separate publicly traded company called Revelyst as part of its previously announced plan.
Vista said in a call with analysts and investors that the separation of its sporting and outdoor goods units will be formalized at the closing of its deal with CSG.
Czech-based CSG has seen its revenue and profits rise since Russia’s invasion of Ukraine as demand for heavy military equipment and ammunition to ship to Ukraine soared.
It had a consolidated revenue of 25 billion Czech crowns ($1.07 billion) in 2022 and has been on the lookout for more acquisitions since it took a 70% stake in Italian small-calibre ammunition maker Fiocchi Munizioni last December.
CSG said it plans to take $1.11 billion of debt financing to fund the deal with Vista Outdoor.
