For over two years, the industry has watched happenings at Vista Outdoors. Initially, Vista set out to break itself into two separate companies. The goal was to unlock value in the non-gun portions of the massive Vista portfolio. The initial plan would split the company into two publicly traded companies: Revelyst, the non-gun companies, and The Kinetic Group, the ammunition business that encompassed CCI, Federal, Remington, Hevi-Shot and Speer.

That process changed as private groups made overtures to acquire The Kinetic Group. And from that point, the acquisition game was on. Over the past two years, offers and counter-offers from suitors flew. Two weeks ago, Czech Sport Group (CSG) closed the deal for The Kinetic Group, adding it to their portfolio of international holdings.

This week, QA Outdoors’ Jim Shepherd talked with The Kinetic Group’s Chairman and CEO, Jason Vanderbrink, about the arduous process, what the new ownership will mean to customers and what’s ahead for the companies now under CSG ownership.

Jason Vanderbrink
Yeah, so on May 5, 2022, which is over 900 days from November 27 of this year when we closed the transaction we we announced that we were gonna split up Vista Outdoor and two separate, but publicly traded,companies. We would have Revelyst and The Kinetic Group, both listed on the New York Stock Exchange. It made sense to do that because the valuation that Wall Street gives to ammunition companies. We were undervalued on the outdoor product side. As long as a majority of your revenue was tied to guns or ammo, it hurt the value of Revelyst. So to unlock the value of Revelyst to our shareholders, we had to separate it from the ammunition business, That was a great strategy, but as we started down that road, we had a lot of interest in private companies buying The Kinetic Group. It’s been played out in the public arena, unfortunately, for the last couple of years. We had multiple bidders trying to buy The Kinetic Group, which was great for shareholders.

So fast-forwarding to a couple weeks ago, we closed the CST transaction and and the shareholders made out well. The company made out well, because we're now in private hands, which has a lot of advantages to it, especially in our industry. We found a great home for our brands, a great home for employees and our four factories in the United States.

Jason Vanderbrink
I read all of the public reports. I understand all of the concerns, but I say to everyone: you may not like it, or doubt it, but the Czech owners with Michael Strnad and the team are fantastic owners.

I understand it's not American owned anymore, but at the same time, if you look at the firearms industry, there are a plethora of firearms manufacturers that are foreign but have US manufacturing bases. Our customers, our consumers, have nothing to worry about. While Kinetic is still foreign owned, I'm Chairman of Board for The Kinetic Group, still CEO. We still have the same management team. There’s no manufacturing leaving the United States -it’s actually quite the opposite. We will further invest in the United States now that we're in private hands. That’s what we should all be focusing on, because it’s going to lead to a lot of opportunities we wouldn’t have. Being privately held unlocked a lot of value that wouldn’t be there in the public markets.

Jason Vanderbrink
They wanted access to the US commercial market. What better way to have access to that market than to purchase The Kinetic Group. The ironic thing about this transaction is that people are thinking we're gonna ship manufacturing jobs or products overseas. It's literally the opposite of that. It's bringing money into the United States to expand US operations while also gaining a market where they don't they don't play a major role. I understand all of the emotion and concern. It’s good questions, and a great debate to have, but when you get to the reality of it, CSG’s not gonna spend over $2 billion and buy a company to hurt the business. It’s actually quite the opposite.

Jason Vanderbrink
Exactly. 

Jason Vanderbrink
Absolutely nothing. They’ll see the sales the same salesforce calling on them. That will be the exact same. It will be literally invisible to our retail customers and to the consumers. 

Jason Vanderbrink
They have seen a long drawn out process. Like I said earlier, it’s unfortunate it was such a public debate. But employees have nothing to worry about. I’ve reassured them every time I go to the factories. I talk to them personally. What this does is give us exposure into some markets and customers where we don’t play. For our four factories in the United States really good, because it should get more business for us.

Jason Vanderbrink
It's week two into it, but it could. For the most part, you know, they’re large artillery builders. So you know, we should reap some benefits as a company, as it will open up some broader markets we don’t services today. But we will still be a small caliber business.

Jason Vanderbrink
It took such a public public debate. I tell everyone next to the US steel divestiture, I think we ran the headlines this year. Now, I think everyone's relieved. I know we're relieved, the employees are relieved, and we have a good home. We have a great ownership group and it's gonna lead to great things. I know it will. 

Jason Vanderbrink
Yeah, yeah 

Jason Vanderbrink
No, you know a public company has a multitude of challenges. A multitude of them Wall Street investors, and analysts. There are just certain things you have to do in a public company. But I can assure you that there’s not a company that’s ever done more for the Second Amendment. We have, and that will be apparent.  Sometimes you may wanna go more public with that; lean into it a little heavier. But, there's not a company that pays more in federal excise taxes than we do, or does more for conservation; does more for military law-enforcement, and that will not go backwards, one bit. A tremendous amount of our workforce are veterans. I think you can look at some of the things that we do. We never did them for publicity reasons. 

The public has no idea about our support for local law enforcement or supporting local police foundations, Purple Heart recipients, Medal of Honor recipients. We never did it for publicity reasons.. We never went public, but there’s not another company in the industry more committed to the Second Amendment, and that will never change.

Jason Vanderbrink
Yeah, but the business ran on its own. The brand groups ran on their own.The other side of the business never came in and asked us, or told us where to spend money, or who to support —none of that stuff.  The board directors, at the end of the day, let the businesses run. 

While Vista was a major company and a great company to work for, ultimately on The Kinetic Side, all of the business decisions started and stopped with me. Sometimes, that’s lost in translation.

Jason Vanderbrink
That's right. 

Jason Vanderbrink
Yeah. There are certain things that that we couldn’t do. You know, we may wanted, for instance, to have gotten more aggressive on some marketing campaigns or go do some stuff. But at the same time, you still have to run a business built on ethics and integrity. So I mean, yes, to answer your question directly. But at the same time, you’re still going to have some of that kind of stuff, you just won’t have all the public filings.

Jason Vanderbrink
I see the innovation pipeline. You will see here at SHOT Show that the innovation pipeline is as robust as it’s ever been. We’re gonna launch a product at the SHOT Show that is probably the biggest product that we will have launched in in our history. 

So you will see game-changing technology. We have a continued sense of urgency: how do we take more market share, become more innovative, but never lose focus that we have to be a consumer-centricorganization. Whatever the consumer wants is what we have to give them. We’ll continue to do that as best we can, and as fast as we can.