Vista Outdoors announced Tuesday that it is considering putting Savage Arms up for sale as part of a “strategic business transformation plan.”
“Our review identified product categories that are core to the company’s long-term business strategy,” said Vista Outdoor Chief Executive Officer Chris Metz.
“We believe future investment should focus on categories where Vista Outdoor can achieve sustainable growth, maximize operational efficiencies, deliver leadership economics, and drive shareholder value,” he continued.
Apparently, Savage Arms isn’t one of those core categories. Along with Jimmy Styks paddle boards and Bell bike helmets, as well as a few other brands, Savage and Stevens would be on the chopping block.
The company believes that by offloading these categories, aka exploring “strategic options” for them, it will “significantly reduce the company’s leverage, improve financial flexibility and the efficiency of its capital structure, and provide additional resources to reinvest in core product categories, both organically and through acquisition.”
While it may be giving up Savage, Vista Outdoors does not plan to altogether leave the gun biz. The company said that it will focus on ammo manufacturing, presumably with its Federal Premium brand.
“Vista Outdoor is excited about the potential of each of our core businesses, particularly ammunition, which is our largest core business.” said Metz.
“An increased focus on our heritage ammunition business will manifest itself in more innovative and breakthrough new products introduced over the next few years,” Metz added. “We also anticipate that by prioritizing this business, we will be able to invest more capital to further enhance and expand our global leadership position.”
News of this announcement caused Vista’s stock to fall 17 percent to $13.85, according to Bloomberg News. That’s the biggest single-day drop for Vista since Nov. 9.