Vista Out of doors Agrees to Purchase Fox Racing for $540M

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Vista Outdoor Inc. announced today that it will acquire apparel and lifestyle brand Fox Racing for $540 million, with the possibility of an additional $50 million earnout depending on the brand’s financial support Goals achieved.

The deal is expected to close in the second quarter of 2023 and Fox’s current CEO, Jeffrey McGuane, is expected to lead the company along with the rest of the existing leadership within the California-based brand, which specializes in clothing and protective gear for the Takeover lead mountain bike and motorsport.

Fox Racing says it grew net sales at a compound annual growth rate of about 20% from 2019 through 2021 and expects to surpass that growth in calendar 2022. The Company expects annualized net sales and Adjusted EBITDA of approximately $350 million and $55 million for calendar year 2022, respectively.

The purchase will be funded through a combination of Vista Outdoor’s existing asset-based revolving credit facility and a new $350 million secured loan.

Vista Outdoor currently owns 39 brands across the outdoor industry including Giro, Blackburn, QuietKat and a number of shooting sports brands. Earlier this year, the company announced plans to split into two different companies to separate the shooting and non-shooting categories. In that announcement, Vista Outdoors said it would redistribute shares of its non-shooting so-called Outdoor Products brand to shareholders in 2023 as the company moves into its next phase.

In the press release, the company didn’t mention the controversy that surrounded it in 2018, when the outdoor industry reckoned on its relationship to gun violence and several major retailers boycotted the company.

Still, like the rest of the outdoor industry, Vista Outdoor has grown significantly in recent years, posting 37% revenue growth in fiscal 2021.

Over the past four years we have built a diversified portfolio of iconic outdoor brands led by a proven leadership team that continues to perform well and deliver strong results for our shareholders. With the acquisition of Fox Racing, we continue the successful execution of our strategy of using value-added acquisitions to expand our leadership position and capture long-term growth opportunities in the outdoor leisure space. The acquisition of Fox Racing meets all of our financial and strategic acquisition criteria, even before considering potential benefits from combining Fox Racing with our existing business. I’m pleased that we’ve continued to add category-leading brands like Fox Racing to our portfolio, while maintaining a strong balance sheet and reinvesting in our existing business to drive organic growth.”Chris Metz, CEO of Vista Outdoor

We are excited to join the Vista Outdoor family. Together we can leverage the heritage of our leading brands, leverage new supply chain synergies, expand our deep and established channels, and appeal to an expanded customer base. Combined with improved access to capital for innovation and scale, we believe this transaction is a win-win for all parties involved. Vista Outdoor’s leadership team has demonstrated that they have an effective, repeatable acquisition model, making Vista Outdoor the clear acquirer of choice for Fox Racing. It’s not often that an acquired company can remain true to its culture and customer base while reaping the benefits of Vista Outdoor’s Centers of Excellence, extensive retail partnerships, innovation engines and a leadership team that enables a founder mindset and results. driven culture. Needless to say, we’re excited about this next chapter for Fox Racing.Jeffrey McGuane, CEO of Fox Racing