Vista Outdoors Sells CCI and Remington Ammunition to European Holding Company

This week we got the first public announcement of Vista Outdoors Sale of Federal, CCI, Speer, Hevi-Shot and Remington ammunition manufacturing brands to a Czechoslovakia-based holding company. Czechoslovak Group (CSG) purchased the American brands in a deal worth $1.91 billion.

The sale it said to be completed, with the transfer of ownership happening in 2024. There is no verified information about what will happen to the US Facilities, employees, or American-made products, including percussion caps. More on this below.

Vista Outdoor (VSTO.N) said on Monday 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.

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.

CSG said it plans to take $1.11 billion of debt financing to fund the deal with Vista Outdoor.

($1 = 23.4040 Czech crowns)

Gary McArthur, interim CEO of Vista Outdoor had this to say:

“This is an important strategic step for our company in creating value through separating our Outdoor Products and Sporting Products segments. The previously announced plan to separate our businesses has positioned us to execute seamlessly on this transaction, which we believe is the best path to maximize value for our stockholders, while better positioning Sporting Products and Outdoor Products for future success.”

Jason Vanderbrink, CEO of Vista Outdoor Sporting Products had this to say;

“We are confident that CSG is a great home for our leading ammunition brands. The company is fully committed to our iconic American brands and expanding our legacy of U.S. manufacturing, support for military and law enforcement customers, and investments in conservation and our hunting and shooting heritage. We are excited to work closely with the CSG team as we enter this next phase and position our brands for long-term success.”

CSG had this to say about the purchase:

“Jason and the Sporting Products leadership team have a strong heritage of delivering high quality products, and we are pleased to welcome them to the CSG family of companies as we partner to support their next chapter,” said Strnad, CEO of CSG. “We look forward to building on the company’s success in delivering innovative, quality products and are confident in the long-term value we can create together. We are committed to expanding their legacy of U.S. manufacturing and providing resources to accelerate their growth.”

What does the sale of CCI and Remington mean for muzzleloading?

Muzzleloading is a tiny part of CCI and Remington’s business model. By their own admission, they don’t spend much time producing percussion caps for the muzzleloading market. With that limited attention, it’s likely muzzleloading won’t see the affects of this sale, if there are any, for some time.

Speculation abounds about the offshoring of the facilities and manufacturing as a death blow to American production, but nothing official has been published about relocation Right now, as far as we understand it, this is an ownership transfer first. Any other changes will be announced, if there are any, after the transfer of ownership in 2024.

Historically, how new ownership of a brand or brands changes production or products can go either way. This could mean major change for all of these brands or minimal change. That possible change of course can vary over time. What these brands look like in 2 years may differ from how they look in 10 years.

A Symptom of a larger problem (Opinion)

It is my opinion that the hearts of the people in charge of the “Sporting” division at Vista Outdoors were not in this market. There are reports from the financial leaders saying that Vista continued to post loss after loss over the last several years. How that happens with the obscene demand for ammunition and the increased prices of the ammunition civilian customers have seen, I don’t know. It could be the cost of raw materials, components, people, regulation, greed, or any number of other things.

These brands were started, for the most part, by people who lived to shoot, hunt, and be outdoors. They built these companies because they were businessmen with ideas and capitalized on them. Now, in the 21st century, we are seeing at least 1 generation of leadership separation from the founders and founder families of these companies. Companies are becoming “brands”, not owned by a family, but a conglomerate of suits whose only job is to turn $1 into $10 as quickly as possible, any way possible. It’s my opinion that this is what we are seeing here with Vista and their sale of these brands.

Business practices like this aren’t to improve the business, the product, the experience of the customer, or even the culture these businesses need to survive. These decisions are made to make the numbers on a spreadsheet look better and nothing more.

We must support privately owned businesses as much as possible to protect the future of shooting sports and American culture in the United States.