With two transformative acquisitions announced in less than a month, the Vista Outdoor Inc. team has been busy this summer as the company continued to refine and reshape its vast portfolio.
In July, the Anoka, Minnesota-based parent company of more than three dozen outdoor and sporting products brands signed definitive agreements to acquire Irvine, California-based Fox Racing for $590 million and Bozeman, Montana-based Simms Fishing Products for $193 million.
Fox Racing will boost Vista Outdoor's action sports cred, and Simms gives Vista Outdoor an industry-leading platform brand in the fishing space. Equally important, the brands will stay true to their roots as leaders in their respective categories.
These latest market-shifting deals are further proof that Vista Outdoor, with its growing array of powerhouse brands, is the acquirer of choice in the outdoor industry. Moreover, the newest assets are sure to be foundational for Vista Outdoor's next chapter, announced a few months ago and coming into focus with each strategic maneuver.
On May 5, the multibillion-dollar corporation announced it would separate into two independent, publicly traded companies--Outdoor Products and Sporting Products, each of which will operate under new names and stock tickers beginning in 2023. Fox Racing and Simms will join CamelBak, Bushnell, Bell, Giro, QuietKat, and more in the Outdoor Products company, to be named later this year.
To better understand how Vista Outdoor will leverage these newest portfolio members to become one of the industry's largest, most diversified outdoor recreation companies, and to see how these brands will flourish under the Vista Outdoor banner, here's a closer look at each deal and what they'll mean in the short and long terms.
Simms: A Trophy Acquisition
Vista landed a keeper in late July when it signed a definitive agreement to acquire Simms Fishing Products.
Founded in 1980 and acquired in 1993 by K.C. Walsh, its current Executive Chairman, Simms is now one of the outdoor industry's most iconic and innovative fishing gear and apparel companies. It is also a purpose-driven brand that resonates with consumers across the globe. The company's products are used by more than 8,500 Simms-sponsored fishing professionals and are distributed through specialty retail stores, both domestically and internationally, and directly to consumers through simmsfishing.com.
After the acquisition closes, Simms will continue to be based in Montana, where it will produce the quality apparel and gear that customers have grown to know and love for the last 30 years, and will remain focused on conservation efforts. But the brand will also become the first asset in Vista Outdoor's new fishing platform, which is sure to delight fishing enthusiasts around the world as the sport and category grow.
"Simms will be a central plank in our long-term growth strategy and will be the anchor of our new fishing platform within Outdoor Products," said Chris Metz, Vista’s CEO. "Fishing, particularly fly fishing where Simms has its roots, is a natural adjacency to our Outdoor Products business, and Simms serves an enthusiast consumer demographic that has proven to be largely recession-resistant over time. With a beloved, household name brand like Simms leading the way, we believe that we can create a fishing platform that serves the 55 million-plus anglers while delivering long-term growth and value for our shareholders for years to come."
Joining Vista Outdoor not only gives the parent company a sought-after fishing platform but will help Simms, whose annual revenue is now $110 million, create more brand loyalists by increasing its production, sales, and customer base. (Click here for more details on the Simms transaction.)
"Simms Fishing Products has become the most exciting brand in sport fishing, driving product innovation with our award-winning apparel, outerwear, footwear, and accessories," Walsh said. "Through our high-performance products, we encourage anglers to spend more time on the water--while advocating for healthy fisheries, responsible use, and clean water. We are thrilled to be joining the Vista Outdoor family of brands. It is hard to imagine a better partner for Simms. Vista Outdoor is committed to helping us build continued momentum through operational expertise, access to growth capital, and their Supply Chain and Digital Centers of Excellence."
Full Speed Ahead with Fox Racing
Vista Outdoor on July 6 announced it had signed a definitive agreement to add Fox Racing to its portfolio--where it will be well-positioned alongside Bell Helmets, Giro, Blackburn, Krash, Copilot, and Raskullz. The acquisition adds yet another global icon to its already legendary lineup of action sports brands.
"The addition of Fox Racing to our portfolio will allow us to target multiple consumer demographics across mountain and road biking, skiing/snowboarding, and powersports," Metz said. "We expect that Fox Racing and our legacy teams will find multiple opportunities to leverage core competencies, enhance supply chain efficiency and resiliency, and better serve our customers and consumers to drive future growth. We believe that the combined platform will make each business stronger and more profitable tomorrow than they are today while allowing us to continue to deliver long-term returns for shareholders."
The deal, which adds approximately $350 million in revenue and $55 million in EBITDA, also gives Fox Racing plenty of runway to scale production while remaining true to its 50-year legacy as a leading voice in the motocross and adventure community. Keeping that "founder's mentality" was critical for Fox Racing before it decided to join the Vista Outdoor family. (Click here for more details on the Fox Racing transaction.)
"Together we can leverage the heritage of our leading brands, enjoy new supply chain synergies, expand our deep and established channels and target an expanded customer base," said Jeffrey McGuane, CEO of Fox Racing, who will continue to lead the company following the closing of the acquisition. "Combined with enhanced access to capital for innovation and scale, we believe this transaction is a win-win for all involved. Vista Outdoor's leadership team has proven they have an effective, repeatable acquisition model, making Vista Outdoor the clear acquirer of choice for Fox Racing. It is not often that an acquired company can remain true to its culture and customer base, while also tapping into the benefits of Vista Outdoor's Centers of Excellence, vast retail partnerships, innovation engines, and a leadership team that enables a founder's mentality and results-driven culture. Needless to say, we are thrilled about this next chapter for Fox Racing."
More Change on the Horizon
The next chapter for Vista Outdoor's Outdoor Products company will include a fresh name, stock ticker, logo, and more. One change has already been announced. The new company plans to establish its corporate headquarters in Bozeman, a town that serves as the home base not only for Simms but another Vista brand, Stone Glacier, as well as a key hub for the outdoor industry. Yet another Vista brand Blackhawk, though based in Virginia, operates a manufacturing facility in nearby Manhattan, Montana.
Moreover, the Vista Outdoor Foundation, now in its second year, is looking to tap into the company's newest brands to expand its grant partnerships with nonprofits that promote conservation, outdoor access, and other causes that unite the company's diverse portfolio of brands and customers.
"The cultural alignment of Fox and Simms meshes well with our existing ethos and philosophy as it relates to conservation access and getting more people into the outdoors," said Fred Ferguson, Vista Outdoor's VP of Public Affairs and Communications and President of the Vista Outdoor Foundation. "The Foundation Board met recently to map out our calendar year 2022. Our giving cycle is not yet solidified, but we do expect to make grants and issue funding to outdoor nonprofits this year. Before that happens, we'll take the time to solicit feedback from Fox and Simms and incorporate that into our 2022 strategy."
Vista Outdoor reported first-quarter earnings for its fiscal year 2023 on July 27. Click here for the report, including commentary from CEO Chris Metz and CFO Sudhanshu Priyadarshi on the period's financial performance and the company's latest acquisitions. Drop us an email to learn more about Vista Outdoor and our brands. Media Contact: Eric Smith: 901-573-9156, email@example.com.
Vista Outdoor (NYSE: VSTO) is the parent company of more than three dozen renowned brands that design, manufacture, and market sporting and outdoor products. We serve a broad and diverse range of consumers around the globe, including outdoor enthusiasts, golfers, cyclists, backyard grillers, campers, hunters, recreational shooters, athletes, as well as law enforcement, and military professionals. Vista Outdoor products are sold at leading retailers and distributors across North America and worldwide. For news and information, visit our website at www.vistaoutdoor.com.
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