Vista Outdoor has entered into a definitive agreement with BRG Sports, Inc. to acquire BRG Sports’ Action Sports division, which is operated by Bell Sports Corp. and includes the brands Bell and Giro, and C-Preme and Blackburn. Products marketed under the acquired brands include helmets for cycling, snow sports, and powersports, as well as goggles, footwear and a variety of cycling accessories. BRG Sports will maintain ownership of Riddell.
Vista Outdoor will pay a purchase price of $400 million, along with additional contingent consideration payable if incremental profitability growth milestones within the Powersports product line are achieved. The purchase price is subject to a customary working capital adjustment. Vista Outdoor expects calendar year 2016 net sales for the Action Sports division of approximately $350 million. The purchase price represents a resulting effective multiple of approximately 10x the expected calendar year 2016 EBITDA for the acquired brands.
The completed acquisition will be integrated into Vista’s Outdoor Products segment, resulting in a balancing of Vista Outdoor’s brand portfolio between Shooting Sports and Outdoor Products. The transaction is subject to regulatory approvals and customary closing conditions. Vista Outdoor anticipates closing the transaction in the next 30 to 60 days.
“This is our third acquisition since becoming an independent public company one year ago, and demonstrates our commitment to creating a solid leadership position in the individual outdoor recreation market with top-tier brands and market-leading capabilities,” said Vista Outdoor chairman and CEO Mark DeYoung. “Adding these innovative and well-known consumer brands to our portfolio creates a channel leadership position, enabling us to sell a broad suite of Vista Outdoor products to specialty outdoor shops, wholesalers and leading outdoor product retailers.”
Vista Outdoor intends to finance the acquisition through a combination of cash on hand, drawings on its revolving credit facility and increased Term Loan A borrowings of approximately $300 million. Absent transaction and transition costs, Vista Outdoor expects the acquisition to be accretive to FY17 earnings per share.
Action Sports currently is headquartered in Scotts Valley, Calif., and operates facilities in the U.S., Canada, Europe and Asia. The acquisition of Action Sports will include more than 600 employees.
