Vista Outdoors Spin-off Notes

September 8, 2023 Update

Vista filed its information statement for its Outdoor Products spin-off business on September 5, 2023.

May 16, 2023 Update

Some comments from the Q1 Earnings call on the spinoff:

November 22, 2022 Update

Some comments from the Q3 Earnings call on the spinoff:

August 3, 2022 Update

  • Short thesis rests on expected margin deterioration
  • I don’t have a strong view

May 6, 2022 Update

Vista Outdoor (VSTO) announced this week that it plans to split into two publicly traded companies, separating their Outdoor Products ($1.3BN in revenue) and Sporting Products ($1.7BN) segments. Here’s the slide deck presentation.

After the spin-off, the Sporting Products business (which will be renamed) will continue to be the world’s leading manufacturer of ammunition. Following the separation, Outdoor Products (also to be renamed) will be an industry-leading, diversified portfolio of outdoor brands, like CamelBak. The estimated total global addressable market, for the outdoor products will be ~ $100 billion.

The transaction is anticipated to be a tax-free distribution to shareholders of 100% of the stock of its Outdoor Products segment, which will become the new, independent publicly traded company. The split is expected to be completed in 2023. 

My guess is this translation is being driven by ESG concerns. Nobody wants to own a gun company (the RemainCo). Vista reported results recently and they looked good. Guidance for 2022 is for growth which is a little surprising as American Outdoor Brands (AOUT) expects sales to decline by ~10%. This idea isn’t actionable today, but looks like an interesting set-up.