Vista Outdoor Inc. has sold its Savage Arms and Stevens firearms brands to a financial buyer for $170 million.
The deal is one of several recent moves by the maker of outdoor consumer and shooting-sports products in a restructuring plan aimed to cut costs and reduce long-term debt. One of those moves was to close the company’s previous headquarters in Utah and move those operations to the Anoka distribution center of Federal Ammunition, its largest subsidiary, about 3 miles from Federal Ammunition’s Anoka manufacturing facility.
“Divesting our Savage brand was a key aspect of our transformation plan,” said Chris Metz, Vista’s chief executive, in a news release. “While it was a difficult decision to sell such an iconic brand, I remain confident that this was the correct choice to help Vista Outdoor grow in those categories where we can have leadership positions.”
Vista offered few details on the buyer of the Savage and Stevens brands other than it was a financial buyer. A filing with the Securities and Exchange Commission listed the legal name of the buyer as Long Range Acquisition LLC.
“We found a strong partner, somebody that is going to invest in Savage,” said company spokesman Rocky Krivijanski. “They are somebody who are likely to retain the management team and to grow the brand.”
Vista does not break down revenue by brand, but Krivijanski said Savage has about 450 employees in Westfield, Mass., and Lakefield, Ontario.
Metz — the former CEO of Plymouth-based Arctic Cat who led that company’s $310 million sale to Textron Corp. in May 2017 — was named CEO of Vista Outdoor in September 2017 and soon after announced a broad transformation plan for Vista. The plan also included the sale of its eyewear business — including such brands as Bolle, Serengeti and Cebe — for an estimated $158 million, the sale of its firearms brands and the headquarters move to Anoka.
With the sale of the two businesses and the headquarters consolidation, the company is largely done with its strategic-alternatives review but will continue to work on cost reduction efforts and more profitable growth of its brands.
For the fiscal year ended March 31, Vista had $2.1 billion in revenue, down 11% from 2018 due partly to the sale of its eyewear business. It would have ranked 22nd on the Star Tribune’s annual list of largest Minnesota-based public companies.
Vista Outdoor was spun off from Alliant Techsystems in February 2015 when Arlington, Va.-based Alliant merged with Orbital Sciences Corp. Alliant had acquired the Savage Arms business for its sporting group in 2013.
The spinoff from Alliant created an independent company, but one with more than $1 billion in long-term debt as of March 31, 2017.
Through deals and aggressive debt repayment, Vista’s long-term debt has been whittled to $685 million in its most recent fiscal year ended March 31.
“Reducing our debt is a key part of turning around our business,” Metz said. “Selling Savage and further reducing our overall leverage will improve our financial flexibility and better position the company for long-term growth.”
Metz credited the Savage brand as being integral to the creation of the Vista Outdoor business but said the company does not have the resources needed to grow Savage and Stevens into a full-service firearms company. The move also gives its Federal and other ammunition brands more latitude to work closer with other industry partners.
Now the company will go forward by concentrating on ammunition, hunting and shooting accessories, hydration bottles and packs, outdoor cooking products, and cycling/ski helmets and accessories.