Vista Outdoor Acquires Fox Racing For $540 Million

Fox Racing CEO Jeffrey McGuane will continue to lead the company after the acquisition, as will all leadership teams. Vista Outdoor expects to close the transaction in the second quarter of 2023.

Vista Outdoor's sports division includes Bell Helmets, Giro, Blackburn and QuietKat. Fox Racing offers protective gear, including helmets and apparel for mountain bikes and motocross. The acquisition will add approximately $350 million in revenue to Vista's Outdoor Products segment. Fox Racing has been a separate company from Fox Factory (suspension brand) since the late 1970s. Fox Factory is now a public company and also owns RaceFace, Marzocchi and Easton bikes.

Fox Racing said its net sales will grow at a compound annual growth rate of about 20% from 2019 to 2021, with growth expected to exceed that in 2022.

Vista Outdoor CEO Chris Metz said, "Over the past four years, we have built a diverse portfolio of iconic outdoor brands led by a proven leadership team that continues to execute brilliantly and deliver great value to our shareholders. strong performance."

"Through the acquisition of Fox Racing, we will continue to successfully execute our strategy of leveraging value-added acquisitions to expand our leadership and ability to capitalize on long-term growth opportunities in outdoor recreation. The Fox Racing acquisition meets all of our financial and strategic acquisition criteria, even Before considering the potential benefits of merging Fox Racing with our existing business. I am pleased that we can continue to add category-leading brands such as Fox Racing to our portfolio while maintaining a strong balance sheet and reinvesting in our current Some businesses drive organic growth.”

Vista Outdoor has acquired Colorado e-bike brand QuietKat.

Fox Racing CEO Jeffrey McGuane said, "Together we can leverage the legacy of our leading brands, enjoy new supply chain synergies, expand our deep and proven pipeline, and target an expanded customer base. Coupled with the opportunity to innovate and scale Access to capital, we believe this transaction is a win and a win for all involved."

"Vista Outdoor's leadership team has proven they have an effective, repeatable acquisition model, making Vista Outdoor a clear acquirer for Fox Racing. Acquired companies leverage Vista Outdoor's Center of Excellence, vast retail partnerships, innovative Engine and the benefits of a leadership team that supports a founder mentality and a results-driven culture.”

For 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 the transaction to be immediately accretive to earnings, excluding transaction costs, transition costs and inventory increases.

Vista Outdoor said it expects to fund the financing through a combination of an asset-based revolving credit facility of $600 million, which will replace Vista Outdoor's existing asset-based revolving credit facility, and a secured term loan facility of $350 million. Funding for acquisitions. After the completion of this transaction, the leverage ratio of Envision Outdoor is expected to be lower than 1.5 times, within the target leverage ratio range of 1-2 times.