Vista Outdoor has agreed to acquire California-based Fox Racing, the mountain bike, motocross and lifestyle gear provider, for US$540 million.
For calendar year 2022, Fox Racing’s full-year net sales and adjusted EBITDA are expected to be approximately US$350 million and US$55 million, respectively. Vista Outdoor expects the transaction to be immediately accretive (adding top-line value) to earnings – excluding transaction costs, transition costs and inventory step-up.
In addition to the US$540 million purchase price, there is also potential for an additional US$50 million earnout based on Fox Racing’s financial performance.
Fox Racing reportedly grew net sales by a compound annual growth rate (CAGR) of approximately 20% from calendar year 2019 to 2021 and is expected to grow in excess of that in calendar year 2022.
Brands in the Vista portfolio include CamelBak, Bell helmets, and Giro – with Fox Racing seen to complement vista’s existing brand portfolio, expanding its positions in helmets, protective gear and apparel for and mountain biking and motocross.
“Over the last four years, we have built a diversified portfolio of iconic outdoor brands led by a proven leadership team that continues to execute well and drive strong results for our shareholders,” said Chris Metz, Vista Outdoor CEO.
“With the acquisition of Fox Racing, we are continuing the successful implementation of our strategy to use accretive acquisitions to expand our leadership position 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 taking into account potential benefits from combining Fox Racing with our existing business. I am pleased that we have been able to continue 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.
“Fox Racing is an ideal fit for our portfolio with a reputation for high quality helmets, protective gear and apparel for motocross and mountain biking. Motocross and mountain biking are growing and familiar categories for Vista Outdoor.
“Fox Racing is synergistic to our existing action sports business unit, which includes Bell Helmets, Giro, Blackburn, Krash, Copilot and Raskullz. 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 continued, “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. Following our separation, which was previously announced on May 5th, we expect to be one of the largest outdoor recreation companies in the industry.”
Jeffrey McGuane, CEO of Fox Racing, will continue to lead the company following the closing of the acquisition, as will all of Fox Racing’s leadership team.
“We’re excited to join the Vista Outdoor family,” McGuane said. “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.
“Combined with enhanced access to capital for innovation and scale, we believe this transaction is a win-win for all involved.
He added “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.”
www.vistaoutdoor.com
www.foxracing.com
