Vista Outdoor Acquires Fox Racing: Read What's The Advantage

Vista Outdoor Inc VSTO has agreed to acquire California-based Fox Racing, a performance motocross, mountain bike, and lifestyle gear provider, for $540 million.
There is also potential for an additional $50 million earnout based on Fox Racing's financial performance.
Vista Outdoor expects the deal to be immediately accretive to earnings, excluding transaction costs, transition costs, and inventory step-up.
For the calendar year 2022, Fox Racing's full-year net sales and adjusted EBITDA are expected to be approximately $350 million and $55 million, respectively.
Vista Outdoor expects to finance this acquisition through a combination of a $600 million asset-based revolving credit facility, which will replace Vista Outdoor's existing asset-based revolving credit facility, and a $350 million secured term loan facility. It held $22.6 million in cash and equivalents as of March 31, 2022.
Jeffrey McGuane, CEO of Fox Racing, will continue to lead the company following the closing of the acquisition.
Vista Outdoor expects to close the transaction in the second fiscal quarter of FY23.
Price Action: VSTO shares are trading lower by 8.50% at $27.01 on the last check Wednesday.