Ammunition manufacturer Vista Outdoor (NYSE:VSTO) announced on Monday its intention to sell its sporting products business in a $1.91 billion transaction and revised its full-year sales projection, causing its premarket shares to plummet by 18%.
The sale of the sporting products business, encompassing its firearms and ammunition operations, will be an all-cash deal with Czechoslovak Group a.s. (CSG) and is anticipated to be finalized in the upcoming calendar year, according to Vista Outdoor.
Furthermore, Vista Outdoor has downgraded its fiscal 2024 sales forecast, attributing it to restrained consumer spending on its high-ticket discretionary products in response to higher interest rates. The company now anticipates sales ranging from $2.73 billion to $2.86 billion for the year ending in March 2024, down from its prior projection of $2.85 billion to $2.95 billion.
Earlier this month, Vista Outdoor spun off its outdoor products division, which included items like helmets and water bottles, creating a distinct publicly traded entity named Revelyst, as part of a previously disclosed plan.
CSG is a Czech-based manufacturer of military equipment and civilian products, with some of its military gear used by Ukraine in its conflict with Russia. CSG has been actively seeking additional acquisitions since it acquired a 70% stake in Italian small-caliber ammunition maker Fiocchi Munizioni in December of the previous year. To finance the Vista Outdoor deal, CSG intends to secure $1.11 billion in debt financing.