News & Info: Industry News
Vista Outdoor Inc. said Monday it has reached a deal to sell its Bolle, Serengeti and Cebe eyewear brands for expected proceeds of $158 million, to a “significant” European private-equity fund.
The move is part of the outdoor sports and recreation company’s plan to narrow its focus on four product categories: Ammunition, shooting and hunting accessories, hydration bottles and packs and outdoor cooking.
“We are pleased to have successfully reached an agreement to sell our eyewear and safety business at an attractive price,” said Chief Executive Chris Metz. “We are now turning our efforts to the rest of our divestiture plan as previously communicated in May,” Metz added.
The sale of the eyewear brands is expected to be completed within 30 to 45 days.
Vista Outdoor’s stock VSTO, -0.18% rose 0.2% in midday trade. It has rallied 27% since closing at a record low of $13.04 on May 7, while the S&P 500 indexSPX, +0.88% has gained 4.1% over the same time.
On May 1, as Vista reported a wider-than-expected quarterly loss, the company also announced a strategic transformation plan in response to unfavorable market conditions and some “self-inflicted” issues, after President Trump’s election “turned the shooting sports industry upside down” and after the company grew “too fast and beyond its core,” according to a transcript of a call with analysts provided by FactSet.
On that call, the company said the first step of the transformation was to begin the sale process of its Bolle, Cebe and Serengeti brands. Next, the company said it plans to explore options for its Savage and Stevens firearm brands, as well as for its Bell, Giro and Blackburn actions sports brands and its Jimmy Styks paddle board brands.
The plan was announced as gun makers and sellers faced a backlash after the mass shooting at the Marjory Stoneman Douglas in Parkland, Fla. which left 17 students and staff dead, prompting a number of companies to announce tighter firearm sales policies.
Vista had disclosed in its annual report for fiscal 2018 ended March 31 that shooting sports sales fell 16% from a year ago to $1.16 billion, citing unfavorable pricing and lower volume across all ammunition categories and lower firearms sales because of decreased demand. Outdoor products sales slipped 1.8% to $1.15 billion, with the decrease caused primarily by conditions affecting shooting-related categories.
By Tom Kilgore - Market Watch