Vista Outdoor Inc.'s VSTO operating segment, Revelyst, entered an agreement with Strategic Value Partners, LLC ("SVP") under which SVP-managed funds will acquire Revelyst in an all-cash transaction valued at $1.125 billion.

The deal is expected to enhance growth opportunities for Revelyst through increased investment and expanded resources. The transaction is anticipated to close by January 2025, contingent on the completion of Vista Outdoor's $2.225-billion transaction with Czechoslovak Group, which requires stockholders’ approval.

Revelyst is recognized for its exceptional craftsmanship and dedication to producing innovative products that cater to various consumer activities. The company streamlined its operations and now runs three platforms, including Revelyst Adventure Sports in Irvine, CA, Revelyst Outdoor Performance in Bozeman, Montana and Revelyst Precision Sports Technology in San Diego. This consolidation supports the GEAR Up transformation initiative that aims to enhance resource allocation and strengthen supply-chain efficiency.

The acquisition by SVP positions Revelyst to meet the growing demand for outdoor gear and activities effectively. This strategic partnership enhances Revelyst's market presence and supports long-term growth and profitability. This collaboration is expected to create opportunities and drive margin expansion across its international brand portfolio. It will also enhance the segment’s leadership in the outdoor recreation market.

VSTO’s Price Performance

This Zacks Rank #3 (Hold) company has moved up 18.5% in the past six months compared with the Zacks Leisure and Recreation Products industry’s 11.5% growth. It is benefiting from accretive inorganic moves and organic initiatives, undertaken to expand its product offerings, market reach and operational synergies.

Image Source: Zacks Investment Research

Vista Outdoor intently focuses on boosting its inorganic business moves alongside its organic plans through several strategic initiatives. The initiatives include a capital allocation strategy, along with a cost-reduction and earnings improvement program. VSTO expects to drive value and synergies through mergers & acquisitions to develop its existing brands and increase its product offerings.

Key Picks

Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:

DoubleDown Interactive Co., Ltd. DDI currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DDI has a trailing four-quarter earnings surprise of 22.1%, on average. The stock has increased 85.9% in the past year. The Zacks Consensus Estimate for DDI’s 2024 sales and EPS indicates an increase of 12.6% and 15.8%, respectively, from the year-ago levels.

Norwegian Cruise Line Holdings Ltd. NCLH presently flaunts a Zacks Rank of 1. NCLH has a trailing four-quarter earnings surprise of 5.7%, on average. The stock has moved up 22.4% in the past year.

The Zacks Consensus Estimate for NCLH’s 2024 sales and EPS indicates an increase of 9.9% and 127.1%, respectively, from the year-ago levels.

Royal Caribbean Cruises Ltd. RCL currently carries a Zacks Rank #2 (Buy). RCL has a trailing four-quarter earnings surprise of 18.5%, on average. The stock has surged 103.4% in the past year.

The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates growth of 18.1% and 70.9%, respectively, from the year-ago levels.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report

Norwegian Cruise Line Holdings Ltd. (NCLH) : Free Stock Analysis Report

Vista Outdoor Inc. (VSTO) : Free Stock Analysis Report

DoubleDown Interactive Co., Ltd. Sponsored ADR (DDI) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research