S-4/A 1 revelysts-4a3424.htm S-4/A Document

As filed with the Securities and Exchange Commission on March 4, 2024
Registration No. 333-276525
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
REVELYST, INC.
(Exact name of registrant as specified in its charter)
3949Delaware88-3763984
(Primary Standard Industrial
Classification Code Number)
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
1 Vista Way
Anoka, MN 55303
(763) 433-1000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Jung Choi
General Counsel
Revelyst, Inc.
1 Vista Way
Anoka, MN 55303
(763) 433-1000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
With a copy to:
Jeffrey Ehrich
Co-General Counsel and Corporate Secretary
Jung Choi
Co-General Counsel and Corporate Secretary
Vista Outdoor Inc.
1 Vista Way
Anoka, MN 55303
(763) 433-1000
Craig F. Arcella
Aaron M. Gruber
Bethany A. Pfalzgraf
Cravath, Swaine & Moore LLP
825 8th Avenue
New York, NY 10019
(212) 474-1000
David Kolacek
Nigel Wellings
Alexandra Wilde
David Stringer
Clifford Chance Prague LLP
Jungmannova Plaza
Jungmannova 745/24
110 00 Prague 1
Czech Republic
+420222555222

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. o
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.



The information in this proxy statement/prospectus is not complete and may be changed. A registration statement relating to the securities described in this proxy statement/prospectus has been filed with the U.S. Securities and Exchange Commission. These securities may not be issued until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This proxy statement/prospectus does not constitute an offer to sell or the solicitation of offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY—SUBJECT TO COMPLETION—DATED MARCH 4, 2024

PROSPECTUS FOR UP TO 59,059,950 SHARES OF COMMON STOCK OF REVELYST, INC.
vistalogo1a.jpg
MERGER PROPOSAL – YOUR VOTE IS VERY IMPORTANT
Dear Vista Outdoor Stockholders:
On October 15, 2023, Vista Outdoor Inc. (“Vista Outdoor”) entered into an Agreement and Plan of Merger (as may be amended from time to time, the “Merger Agreement”) with Revelyst, Inc. (“Revelyst”), CSG Elevate II Inc. (“Merger Sub Parent”), CSG Elevate III Inc., a wholly owned subsidiary of Merger Sub Parent (“Merger Sub”), and, solely for the purposes of specific provisions therein, CZECHOSLOVAK GROUP a.s. (“CSG”), pursuant to which, on the terms and conditions set forth therein and in accordance with the Delaware General Corporation Law, Merger Sub will merge with and into Vista Outdoor with Vista Outdoor surviving the merger as a wholly owned subsidiary of Merger Sub Parent (the “Merger” and, together with the other transactions contemplated by the Merger Agreement and the related transaction documents, the “Transaction”).
Pursuant to a Separation Agreement entered into between Vista Outdoor and Revelyst simultaneously with the signing of the Merger Agreement, Vista Outdoor will effect a separation pursuant to which, among other things, the businesses and operations of the Outdoor Products reportable segment of Vista Outdoor (the “Revelyst Business”) will be separated from the other businesses and operations of Vista Outdoor (the “Sporting Products Business”) and transferred to Revelyst. Prior to the consummation of the Merger, (i) pursuant to a Subscription Agreement to be entered into between Merger Sub Parent and Vista Outdoor, Merger Sub Parent will contribute $1,910,000,000 (the “Base Purchase Price”), subject to purchase price adjustments for cash and net working capital, to Vista Outdoor in exchange for shares of common stock, par value $0.01 per share, of Vista Outdoor (the “Vista Outdoor Common Stock”) and (ii) immediately thereafter, Vista Outdoor will contribute the Base Purchase Price, subject to purchase price adjustments for cash, net working capital, debt, transaction expenses and taxes (the “Contribution Amount”), and the Revelyst Business to Revelyst. Following the completion of the foregoing, Merger Sub will merge with and into Vista Outdoor, with Vista Outdoor surviving the Merger and becoming a wholly owned subsidiary of Merger Sub Parent.
On the terms and subject to the conditions set forth in the Merger Agreement, which has been approved by the board of directors of Vista Outdoor (the “Vista Outdoor Board”), at the effective time of the Merger (the “Effective Time”), each share of Vista Outdoor Common Stock issued and outstanding immediately prior to the Effective Time (other than (i) any such shares of Vista Outdoor Common Stock held by Vista Outdoor, its subsidiaries or Merger Sub Parent and (ii) any Appraisal Shares (as defined in the Merger Agreement)) will be converted into the right to receive (a) one fully paid and non-assessable share of common stock, par value $0.01 per share, of Revelyst (“Revelyst Common Stock”) and (b) $12.90 in cash, in each case, per share of Vista Outdoor Common Stock (the “Merger Consideration”).
Following the closing of the Transaction, Revelyst, holding only the Revelyst Business, will be an independent, publicly traded company, and Vista Outdoor, holding only the Sporting Products Business, will be a wholly owned subsidiary of CSG.
It is expected that there will be approximately [          ] shares of Revelyst Common Stock outstanding immediately after the consummation of the Transaction (based on approximately [          ] shares of Vista Outdoor Common Stock outstanding as of [          ]). The actual number of shares of Revelyst Common Stock will depend on the total number of shares of Vista Outdoor Common Stock outstanding immediately prior to the Effective Time. Revelyst intends to file an application to list the Revelyst Common Stock on the New York Stock Exchange under the ticker symbol “GEAR”.
The accompanying proxy statement/prospectus constitutes a prospectus of Revelyst for the Revelyst Common Stock to be issued to Vista Outdoor stockholders in the Transaction as part of the Merger Consideration, as well as a proxy statement in connection with the special meeting (the “Special Meeting”) at which Vista Outdoor stockholders will be asked to consider and vote on the following matters:
a proposal to adopt the Merger Agreement, a copy of which is attached as Annex A to the accompanying proxy statement/prospectus (the “Merger Proposal”);
a proposal to approve, by advisory (non-binding) vote, the compensation that may be paid or become payable to Vista Outdoor’s named executive officers in connection with the consummation of the Merger (the “Advisory Compensation Proposal”); and



a proposal to approve adjournments of the Special Meeting (i) to the extent necessary to ensure that any required supplement or amendment to the accompanying proxy statement/prospectus is provided to the Vista Outdoor stockholders within a reasonable amount of time in advance of the Special Meeting, (ii) to the extent required by a court of competent jurisdiction, (iii) if there are insufficient shares of Vista Outdoor Common Stock represented to constitute a quorum necessary to conduct the business of the Special Meeting or (iv) to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Merger Proposal (the “Adjournment Proposal”).
After careful consideration and deliberation, the Vista Outdoor Board approved the Merger Agreement and Vista Outdoor’s execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby.
The Vista Outdoor Board accordingly recommends that the Vista Outdoor stockholders vote “FOR” the Merger Proposal, “FOR” the Advisory Compensation Proposal and “FOR” the Adjournment Proposal. Vista Outdoor encourages you to read the accompanying proxy statement/prospectus and the documents incorporated by reference therein, carefully and in their entirety. In particular, we urge you to read carefully the section entitled “Risk Factors” beginning on page 37 of the accompanying proxy statement/prospectus.
On behalf of the Vista Outdoor Board, thank you for your consideration and continued support.
Sincerely,
Eric Nyman
Co-Chief Executive Officer
Jason R. Vanderbrink
Co-Chief Executive Officer
Michael Callahan
Chair
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS OR THE SECURITIES TO BE ISSUED PURSUANT TO THE MERGER NOR HAVE THEY DETERMINED IF THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of the accompanying proxy statement/prospectus is [          ], 2024, and it is being mailed to Vista Outdoor stockholders on or about [          ], 2024.



NOTICE OF SPECIAL MEETING OF VISTA OUTDOOR STOCKHOLDERS
To Be Held on [          ], 2024
Dear Vista Outdoor Stockholders:
We are pleased to convene a special meeting of stockholders (the “Special Meeting”) of Vista Outdoor Inc. (“Vista Outdoor”), which will be held on [          ], 2024 at [          ], Central Time (CT), to consider and vote on the following matters:
A proposal to adopt the Agreement and Plan of Merger, dated as of October 15, 2023 (as may be amended from time to time, the “Merger Agreement”), among Vista Outdoor, Revelyst, Inc. (“Revelyst”), CSG Elevate II Inc. (“Merger Sub Parent”), CSG Elevate III Inc., a wholly owned subsidiary of Merger Sub Parent (“Merger Sub”), and, solely for the purposes of specific provisions therein, CZECHOSLOVAK GROUP a.s. (“CSG”), pursuant to which, on the terms and conditions set forth therein and in accordance with the Delaware General Corporation Law, Merger Sub will merge with and into Vista Outdoor with Vista Outdoor surviving the merger as a wholly owned subsidiary of Merger Sub Parent (the “Merger” and, together with the other transactions contemplated by the Merger Agreement and the related transaction documents, the “Transaction”), a copy of which is attached as Annex A to the accompanying proxy statement/prospectus (the “Merger Proposal”);
A proposal to approve, by advisory (non-binding) vote, the compensation that may be paid or become payable to Vista Outdoor’s named executive officers in connection with the consummation of the Merger (the “Advisory Compensation Proposal”); and
A proposal to approve adjournments of the Special Meeting (i) to the extent necessary to ensure that any required supplement or amendment to the accompanying proxy statement/prospectus is provided to the Vista Outdoor stockholders within a reasonable amount of time in advance of the Special Meeting, (ii) to the extent required by a court of competent jurisdiction, (iii) if there are insufficient shares of common stock, par value $0.01 per share, of Vista Outdoor (“Vista Outdoor Common Stock”) represented to constitute a quorum necessary to conduct the business of the Special Meeting or (iv) to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Merger Proposal (the “Adjournment Proposal” and, together with the Merger Proposal and the Advisory Compensation Proposal, the “Proposals”).
No business will be voted on at the Special Meeting except such items as are listed as voting items in the agenda above. Please refer to the accompanying proxy statement/prospectus for further information with respect to the items to be voted on at the Special Meeting.
Access:
The Special Meeting will not be held in person. In order to facilitate stockholder attendance and participation by enabling stockholders to participate from any location at no cost, the Special Meeting will be held virtually on the Internet via a live audio webcast only. Stockholders who wish to attend the virtual Special Meeting on [          ], 2024 may access the meeting via the following link:
www.virtualshareholdermeeting.com/VSTO2024SM
Stockholders accessing the link will then be prompted to enter the 16-digit control number included in their proxy card, or in the instructions provided by their bank, broker or other financial intermediary (for those who hold their shares in “street name”). Once admitted to the Special Meeting, stockholders will be able to vote their shares electronically and submit any questions during the meeting.
Record Date:
[          ], 2024 is the record date for the Special Meeting.



Voting by Proxy:
It is important that your shares be represented and voted at the meeting. Whether or not you plan to attend the virtual Special Meeting, we encourage you to read the accompanying proxy statement/prospectus and submit your proxy or voting instructions as soon as possible. For specific instructions on how to vote your shares, please refer to the instructions in the section entitled “Questions and Answers about the Special Meeting and Voting” beginning on page 10 of the accompanying proxy statement/prospectus or your enclosed proxy card or voting instruction card. You can revoke a proxy at any time prior to its exercise at the Special Meeting by following the instructions in the accompanying proxy statement/prospectus.
After careful consideration and deliberation, the board of directors of Vista Outdoor (the “Vista Outdoor Board”) approved the Merger Agreement and Vista Outdoor’s execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby. The Vista Outdoor Board accordingly recommends that the Vista Outdoor stockholders vote “FOR” the Merger Proposal, “FOR” the Advisory Compensation Proposal and “FOR” the Adjournment Proposal. For more information regarding the recommendations of the Vista Outdoor Board, see “The Transaction—Recommendation of the Vista Outdoor Board; The Vista Outdoor Board’s Reasons for the Transaction” beginning on page 94 of the accompanying proxy statement/prospectus.
Vista Outdoor encourages you to read the accompanying proxy statement/prospectus and the documents incorporated by reference therein, carefully and in their entirety. In particular, we urge you to read carefully the section entitled “Risk Factors” beginning on page 37 of the accompanying proxy statement/prospectus. If you have any questions concerning the Proposals, would like additional copies of the accompanying proxy statement/prospectus or need help voting your shares of Vista Outdoor Common Stock, please contact Vista Outdoor’s proxy solicitor:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
+1 (877) 750-9499 (toll free)
+1 (212) 750-5833
(banks and brokers)
By Order and on behalf of the Vista Outdoor Board,
Jeffrey Ehrich
Co-General Counsel & Corporate Secretary
Vista Outdoor Inc.
Jung Choi
Co-General Counsel & Corporate Secretary
Vista Outdoor Inc.



WHERE YOU CAN FIND ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates by reference certain business, financial and other information about Vista Outdoor from certain documents filed with the U.S. Securities and Exchange Commission (the “SEC”) that have not been included herein or delivered herewith. Vista Outdoor files reports (including annual, quarterly and current reports that may contain audited financial statements), proxy statements and other information with the SEC.
Copies of Vista Outdoor’s filings with the SEC are available to investors without charge by request made to Vista Outdoor in writing or by telephone with the following contact information:
Investor Relations
Vista Outdoor Inc.
1 Vista Way
Anoka, MN 55303
Phone: (612) 704-0147
E-mail: investor.relations@vistaoutdoor.com
TO RECEIVE TIMELY DELIVERY OF THESE MATERIALS, YOU MUST MAKE YOUR REQUESTS NO LATER THAN FIVE BUSINESS DAYS BEFORE THE DATE OF THE SPECIAL MEETING.
You may also obtain printer-friendly versions of Vista Outdoor’s SEC reports at www.vistaoutdoor.com. However, Vista Outdoor is not incorporating the information on Vista Outdoor’s website other than the filings listed below into this proxy statement/prospectus or the registration statement of which this proxy statement/prospectus forms a part. Vista Outdoor’s filings with the SEC are available to the public over the Internet at the SEC’s website at www.sec.gov.
As a result of the Transaction, Revelyst will become subject to the information and reporting requirements of the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”), and, in accordance with the Exchange Act, Revelyst will file periodic reports, proxy statements and other information with the SEC. The registration statement of which this proxy statement/prospectus forms a part, including its exhibits, and the periodic reports, proxy statements and other information that Revelyst files electronically with the SEC will be available for inspection and copying at the SEC’s website at www.sec.gov. You may also obtain printer-friendly versions of Revelyst’s SEC reports at Revelyst’s website, [          ] (which Revelyst expects to be operational on or prior to the closing of the Transaction). However, Revelyst is not incorporating the information on Revelyst’s website into this proxy statement/prospectus or the registration statement of which this proxy statement/prospectus forms a part.
The SEC allows certain information to be “incorporated by reference” into this proxy statement/prospectus. This means that Vista Outdoor can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this proxy statement/prospectus, except for any information modified or superseded by information contained directly in this proxy statement/prospectus or in any document subsequently filed by Vista Outdoor that is also incorporated or deemed to be incorporated by reference herein. This proxy statement/prospectus incorporates by reference the documents set forth below that Vista Outdoor has previously filed with the SEC and any future filings by Vista Outdoor under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, from the date of this proxy statement/prospectus to the date that the Special Meeting is held, except, in any such case, for any information therein that has been furnished rather than filed, which shall not be incorporated herein. Subsequent filings made by Vista Outdoor with the SEC will automatically modify and supersede information in this proxy statement/prospectus. These documents may contain important information about Vista Outdoor and its financial condition.
This proxy statement/prospectus, and the registration statement of which this proxy statement/prospectus forms a part, hereby incorporate by reference the following documents that Vista Outdoor has filed with the SEC, except, in each case, for any information therein that has been furnished rather than filed, which shall not be incorporated herein:
Vista Outdoor’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023, filed with the SEC on May 25, 2023;
i


Vista Outdoor’s Quarterly Reports on Form 10-Q for the fiscal quarters ended June 25, 2023, September 24, 2023 and December 24, 2023, filed with the SEC on July 27, 2023, November 2, 2023 and February 1, 2024, respectively;
Vista Outdoor’s Definitive Proxy Statement, filed with the SEC on June 12, 2023;
the description of Vista Outdoor Common Stock contained in Vista Outdoor’s registration statement on Form 10-12B filed on August 13, 2014, including any amendments or reports filed for the purpose of updating such description.
If you have any questions about the Transaction, please contact Vista Outdoor’s Investor Relations Department by written request to investor.relations@vistaoutdoor.com or by contacting the Investor Relations Department at:
Investor Relations
Vista Outdoor Inc.
1 Vista Way
Anoka, MN 55303
Phone: (612) 704-0147
NONE OF VISTA OUTDOOR, CSG OR REVELYST HAS AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ABOUT THE TRANSACTION OR ABOUT VISTA OUTDOOR, CSG OR REVELYST THAT DIFFERS FROM OR ADDS TO THE INFORMATION IN THIS PROXY STATEMENT/PROSPECTUS OR THE DOCUMENTS THAT VISTA OUTDOOR OR REVELYST PUBLICLY FILES WITH THE SEC. THEREFORE, NONE OF VISTA OUTDOOR, CSG OR REVELYST TAKES RESPONSIBILITY FOR, NOR CAN THEY PROVIDE ASSURANCES AS TO THE RELIABILITY OF, ANY OTHER INFORMATION THAT OTHERS MAY GIVE YOU.
IF YOU ARE IN A JURISDICTION WHERE OFFERS TO EXCHANGE OR SELL, OR SOLICITATIONS OF OFFERS TO EXCHANGE OR PURCHASE, THE SECURITIES OFFERED BY THIS PROXY STATEMENT/PROSPECTUS ARE UNLAWFUL, OR IF YOU ARE A PERSON TO WHOM IT IS UNLAWFUL TO DIRECT THESE TYPES OF ACTIVITIES, THEN THE OFFER PRESENTED IN THIS PROXY STATEMENT/PROSPECTUS DOES NOT EXTEND TO YOU. IF YOU ARE IN A JURISDICTION WHERE SOLICITATIONS OF A PROXY ARE UNLAWFUL, OR IF YOU ARE A PERSON TO WHOM IT IS UNLAWFUL TO DIRECT THESE TYPES OF ACTIVITIES, THEN THE SOLICITATION PRESENTED IN THIS PROXY STATEMENT/PROSPECTUS DOES NOT EXTEND TO YOU.
THE INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS SPEAKS ONLY AS OF ITS DATE UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE APPLIES. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE HEREOF. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN ANY DOCUMENT INCORPORATED BY REFERENCE HEREIN IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE OF SUCH DOCUMENT. ANY STATEMENT CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS OR IN ANY DOCUMENT INCORPORATED INTO THIS PROXY STATEMENT/PROSPECTUS BY REFERENCE AS TO THE CONTENTS OF ANY CONTRACT OR OTHER DOCUMENT REFERRED TO IN THIS PROXY STATEMENT/PROSPECTUS OR IN OTHER DOCUMENTS THAT ARE INCORPORATED BY REFERENCE INTO THIS PROXY STATEMENT/PROSPECTUS ARE NOT NECESSARILY COMPLETE AND, IN EACH INSTANCE, REFERENCE IS MADE TO THE COPY OF THE APPLICABLE CONTRACT OR OTHER DOCUMENT FILED AS AN EXHIBIT TO THE REGISTRATION STATEMENT OF WHICH THIS PROXY STATEMENT/PROSPECTUS FORMS A PART OR OTHERWISE FILED WITH THE SEC. ANY STATEMENT CONTAINED IN A DOCUMENT INCORPORATED OR DEEMED TO BE INCORPORATED BY REFERENCE
ii


INTO THIS PROXY STATEMENT/PROSPECTUS WILL BE DEEMED TO BE MODIFIED OR SUPERSEDED TO THE EXTENT THAT A STATEMENT CONTAINED HEREIN OR IN ANY OTHER SUBSEQUENTLY FILED DOCUMENT THAT ALSO IS OR IS DEEMED TO BE INCORPORATED BY REFERENCE INTO THIS PROXY STATEMENT/PROSPECTUS MODIFIES OR SUPERSEDES SUCH STATEMENT. ANY STATEMENT SO MODIFIED OR SUPERSEDED WILL NOT BE DEEMED, EXCEPT AS SO MODIFIED OR SUPERSEDED, TO CONSTITUTE A PART OF THIS PROXY STATEMENT/PROSPECTUS. NEITHER THE MAILING OF THIS PROXY STATEMENT/PROSPECTUS TO STOCKHOLDERS OF VISTA OUTDOOR, NOR THE TAKING OF ANY ACTIONS CONTEMPLATED HEREBY BY VISTA OUTDOOR AT ANY TIME WILL CREATE ANY IMPLICATION TO THE CONTRARY.
iii


ABOUT THIS PROXY STATEMENT/PROSPECTUS
This proxy statement/prospectus forms a part of a registration statement on Form S-4 (Registration No. 333-276525) filed by Revelyst with the SEC to register under the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”), the issuance of shares of Revelyst Common Stock to Vista Outdoor stockholders pursuant to the Merger Agreement. It constitutes:
a proxy statement under Section 14(a) of the Exchange Act, and a notice of meeting and action to be provided to the Vista Outdoor stockholders in connection with the Special Meeting at which Vista Outdoor stockholders will consider and vote on each of the Proposals to give effect to the Transaction; and
a prospectus of Revelyst under the Securities Act to be provided to the Vista Outdoor stockholders with respect to the shares of Revelyst Common Stock to be issued to Vista Outdoor stockholders in the Transaction as part of the Merger Consideration.
Pursuant to the instructions to Form S-4, the document which forms a part of this registration statement is also deemed filed pursuant to Vista Outdoor’s obligations under Regulation 14A in connection with the special meeting of Vista Outdoor stockholders to approve the Merger. Vista Outdoor has supplied all information contained in or incorporated by reference into this proxy statement/prospectus relating to Vista Outdoor and Revelyst. CSG has supplied all information contained in this proxy statement/prospectus relating to CSG. Vista Outdoor and CSG have both contributed information relating to the Transaction.
As permitted by SEC rules, this proxy statement/prospectus does not contain all of the information that you can find in the registration statement or its exhibits. For further information pertaining to Revelyst and the shares of Revelyst Common Stock to be issued in connection with the Transaction, reference is made to that registration statement and its exhibits. Each statement contained in this proxy statement/prospectus is qualified in its entirety by reference to the underlying documents. You are encouraged to read the entire registration statement. You may obtain copies of the registration statement, including documents incorporated by reference into the registration statement (and any amendments to those documents), by following the instructions set forth in the section entitled “Where You Can Find Additional Information” beginning on page i.
Unless otherwise indicated or the context otherwise requires, any reference in this proxy statement/prospectus to:
“Adjournment Proposal” means a proposal to approve adjournments of the Special Meeting (i) to the extent necessary to ensure that any required supplement or amendment to this proxy statement/prospectus is provided to the Vista Outdoor stockholders within a reasonable amount of time in advance of the Special Meeting, (ii) to the extent required by a court of competent jurisdiction, (iii) if there are insufficient shares of Vista Outdoor Common Stock represented to constitute a quorum necessary to conduct the business of the Special Meeting or (iv) to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Merger Proposal;
“Advisory Compensation Proposal” means a proposal to approve, by advisory (non-binding) vote, the compensation that may be paid or become payable to Vista Outdoor’s named executive officers in connection with the consummation of the Merger;
“Ancillary Agreements” means any instruments, assignments, documents and agreements executed by Vista Outdoor and Revelyst (or the members of the Sporting Products Group and the Revelyst Group, as applicable) in connection with the implementation of the transactions contemplated by the Separation Agreement, excluding the Merger Agreement;
“Appraisal Shares” means shares of Vista Outdoor Common Stock issued and outstanding immediately prior to the Effective Time and held by any person who is entitled to demand appraisal rights under Section 262 of the DGCL and has properly exercised and perfected their demand for appraisal of such shares of Vista Outdoor Common Stock in the time and manner provided in Section 262 of the DGCL and, as of the Effective Time, has neither effectively withdrawn nor lost their rights to such appraisal and payment under the DGCL;
iv


“Base Purchase Price” means $1,910,000,000;
“Business Day” means any day on which commercial banks are generally open for business in New York, New York, other than a Saturday, a Sunday or a day observed as a holiday in New York, New York under the laws of the State of New York or the federal laws of the United States of America;
“Closing” means the closing of the Merger;
“Closing Date” means the date on which the Closing actually occurs;
“Contribution” means the contribution by Vista Outdoor of the Contribution Amount and the Revelyst Business to Revelyst, in exchange for Revelyst’s issuance of shares of Revelyst Common Stock to Vista Outdoor;
“Contribution Amount” means the Base Purchase Price, subject to purchase price adjustments for cash, net working capital, debt, transaction expenses and taxes;
“CSG” means CZECHOSLOVAK GROUP a.s., a joint stock company incorporated under the laws of the Czech Republic;
“Delaware Court of Chancery” means the Court of Chancery of the State of Delaware;
“DGCL” means the Delaware General Corporation Law;
“EBITDA” means earnings before interest, taxes, depreciation and amortization;
“Effective Time” means the time the Merger becomes effective;
“Employee Matters Agreement” means that certain Employee Matters Agreement, dated as of October 15, 2023, by and between Vista Outdoor and Revelyst, as may be amended from time to time, a copy of which is attached as Annex C to this proxy statement/prospectus;
“End Date” means October 15, 2024, subject to an automatic extension of such date to January 15, 2025 if all the conditions to the Closing have been satisfied or waived on October 15, 2024 other than those conditions (i) pertaining to the completion of certain pre-Closing steps relating to the Separation, (ii) that by their nature are to be satisfied at the Closing and (iii) pertaining to receipt of regulatory approvals, provided that the conditions in (i) and (ii) would have been satisfied on October 15, 2024 if the Closing occurred on such date;
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976;
“Internal Transactions” means the series of internal transactions which Vista Outdoor and certain of Vista Outdoor’s subsidiaries will engage in pursuant to the terms of the Separation Agreement to separate the Revelyst Business from the Sporting Products Business;
“Merger” means the merger of Merger Sub with and into Vista Outdoor with Vista Outdoor surviving the merger as a wholly owned subsidiary of Merger Sub Parent;
“Merger Agreement” means that certain Agreement and Plan of Merger, dated as of October 15, 2023, among Vista Outdoor, Revelyst, Merger Sub Parent, Merger Sub and, solely for the purposes of specific provisions therein, CSG, as may be amended from time to time, a copy of which is attached as Annex A to this proxy statement/prospectus;
“Merger Consideration” means (a) one fully paid and non-assessable share of Revelyst Common Stock and (b) $12.90 in cash, in each case, per share of Vista Outdoor Common Stock;
v


“Merger Proposal” means a proposal to adopt the Merger Agreement, a copy of which is attached as Annex A to this proxy statement/prospectus;
“Merger Sub” means CSG Elevate III Inc., a Delaware corporation and a wholly owned subsidiary of Merger Sub Parent;
“Merger Sub Parent” means CSG Elevate II Inc., a Delaware corporation and a wholly owned subsidiary of CSG;
“NYSE” means the New York Stock Exchange;
“Outdoor Products” means Revelyst, Inc., a Delaware corporation, and is used interchangeably with “Revelyst”;
“Outdoor Products Business” means the businesses and operations of the Outdoor Products reportable segment of Vista Outdoor, and is used interchangeably with “Revelyst Business”;
“Outdoor Products segment” means the Revelyst segment (previously named the Outdoor Products segment) of Vista Outdoor;
“Proposals” means the Merger Proposal, the Advisory Compensation Proposal and the Adjournment Proposal;
“Record Date” means the close of business on [          ], 2024;
“Revelyst” means Revelyst, Inc., a Delaware corporation, and is used interchangeably with “Outdoor Products”;
“Revelyst audited combined financial statements” means Revelyst’s audited historical combined financial statements, which are included elsewhere in this proxy statement/prospectus;
“Revelyst Board” means the board of directors of Revelyst;
“Revelyst Business” means the businesses and operations of the Outdoor Products reportable segment of Vista Outdoor, and is used interchangeably with “Outdoor Products Business”;
“Revelyst Bylaws” means the Amended and Restated Bylaws of Revelyst, a form which is included as an exhibit to the registration statement of which this proxy statement/prospectus forms a part;
“Revelyst Charter” means the Amended and Restated Certificate of Incorporation of Revelyst, a form which is included as an exhibit to the registration statement of which this proxy statement/prospectus forms a part;
“Revelyst combined financial statements” means, collectively, Revelyst’s audited combined financial statements and Revelyst’s unaudited condensed combined financial statements;
“Revelyst Common Stock” means the common stock, par value $0.01 per share, of Revelyst;
“Revelyst Conversion Ratio” means a fraction, the numerator of which is the Vista Outdoor Pre-Closing Stock Price, and the denominator of which is the Revelyst Post-Closing Stock Price;
“Revelyst Group” means (a) Revelyst, (b) each person that will be a subsidiary of Revelyst following the Internal Transactions and the Contribution and immediately prior to the Effective Time and (c) each person that becomes a subsidiary of Revelyst after the Closing;
“Revelyst Post-Closing Stock Price” means the opening price per share of Revelyst Common Stock, trading on the NYSE on the Closing Date (or, if the Closing Date is not a trading day on the NYSE, on the first trading day following the Closing Date);
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“Revelyst unaudited condensed combined financial statements” means Revelyst’s unaudited historical condensed combined financial statements, which are included elsewhere in this proxy statement/prospectus;
“SEC” means the U.S. Securities and Exchange Commission;
“Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder;
“Separation” means (a) the separation of the Revelyst Business from the Sporting Products Business pursuant to the Internal Transactions and the other separation-related actions to be taken pursuant to the Separation Agreement and (b) the Contribution;
“Separation Agreement” means that certain Separation Agreement, dated as of October 15, 2023, by and between Vista Outdoor and Revelyst, as may be amended from time to time, a copy of which is attached as Annex B to this proxy statement/prospectus;
“Special Meeting” means the special meeting at which Vista Outdoor stockholders will be asked to consider and vote on the Proposals;
“Sporting Products Business” means the businesses and operations of Vista Outdoor prior to the Effective Time, other than the Revelyst Business;
“Sporting Products Group” means Vista Outdoor and each of its subsidiaries, but excluding any member of the Revelyst Group;
“Sporting Products segment” means The Kinetic Group segment (previously named the Sporting Products segment) of Vista Outdoor;
“Subscription Agreement” means the subscription agreement to be entered into on the Closing Date between Merger Sub Parent and Vista Outdoor, pursuant to which Merger Sub Parent will subscribe for shares of Vista Outdoor Common Stock upon the terms and subject to the conditions thereof, a copy of which is attached as Annex E to this proxy statement/prospectus;
“Subscription Amount” means the Base Purchase Price, subject to purchase price adjustments for cash and net working capital;
“Surviving Corporation” means Vista Outdoor, as the surviving corporation in the Merger;
“Transaction” means the transactions contemplated by the Merger Agreement and the other Transaction Documents, including the Separation, the Subscription and the Merger;
“Transaction Documents” means the Merger Agreement, the Subscription Agreement, the Separation Agreement, the Employee Matters Agreement, the Transition Services Agreement and the other ancillary agreements described in the Merger Agreement;
“Transferred Companies” means Bell Sports Corp., a Delaware corporation, Vista Outdoor Operations LLC, a Delaware limited liability company, Northstar Outdoors, LLC, a California limited liability company, and Camelbak Acquisition Corp., a Delaware corporation;
“Transition Services Agreement” means the transition services agreement to be entered into on the Closing Date between Vista Outdoor and Revelyst, the form of which is attached as Annex D to this proxy statement/prospectus;
“Vista Outdoor” means Vista Outdoor Inc., a Delaware corporation;
“Vista Outdoor Board” or “Board” means the board of directors of Vista Outdoor;
“Vista Outdoor Bylaws” means the Amended and Restated Bylaws of Vista Outdoor;
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“Vista Outdoor Charter” means the Amended and Restated Charter of Vista Outdoor;
“Vista Outdoor Common Stock” means the common stock, par value $0.01 per share, of Vista Outdoor; and
“Vista Outdoor Pre-Closing Stock Price” means the closing price per share of Vista Outdoor Common Stock trading during the last full trading session immediately before the Closing Date.
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TRADEMARKS AND SERVICE MARKS
Each of Vista Outdoor, CSG and Revelyst owns or has rights to various trademarks, logos, service marks and trade names that each uses in connection with the operation of its business. Each of Vista Outdoor, CSG and Revelyst also owns or has the rights to copyrights that protect the content of their respective products. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to in this proxy statement/prospectus are listed without the ™, ® and © symbols, but such references do not constitute a waiver of any rights that might be associated with the respective trademarks, service marks, trade names and copyrights included or referred to in this proxy statement/prospectus.
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TABLE OF CONTENTS
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QUESTIONS AND ANSWERS ABOUT THE TRANSACTION
The following are some of the questions that you may have regarding the Transaction and brief answers to those questions. For more detailed information about the matters discussed in these questions and answers, see “The Transaction” beginning on page 72, “Merger Agreement” beginning on page 134 and “Separation Agreement” beginning on page 161. These questions and answers, as well as the section entitled “Summary” beginning on page 16, are not meant to be a substitute for the information contained in the remainder of this proxy statement/prospectus, and this information is qualified in its entirety by the more detailed descriptions and explanations contained elsewhere in this proxy statement/prospectus. You are urged to read this proxy statement/prospectus in its entirety. Additional important information is also contained in the annexes to this proxy statement/prospectus. You should pay special attention to the section entitled “Risk Factors” beginning on page 37 and the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 64.
Q:Why am I receiving these materials?
A:You are receiving these materials because you are a stockholder of record or beneficial owner of Vista Outdoor Common Stock as of the Record Date for the Special Meeting. Vista Outdoor and CSG have agreed that pursuant to the transactions set forth in the Merger Agreement and the Separation Agreement, Vista Outdoor will sell its Sporting Products Business to CSG and in exchange therefor existing Vista Outdoor stockholders will receive the Merger Consideration for each share of Vista Outdoor Common Stock. Copies of the Merger Agreement and the Separation Agreement are attached as Annexes A and B, respectively, to this proxy statement/prospectus. This proxy statement/prospectus is:
a proxy statement under Section 14(a) of the Exchange Act and a notice of meeting and action to be provided to the Vista Outdoor stockholders in connection with the Special Meeting at which Vista Outdoor stockholders will consider and vote on each of the Proposals to give effect to the Transaction; and
a prospectus of Revelyst under the Securities Act, to be provided to the Vista Outdoor stockholders with respect to the shares of Revelyst Common Stock to be issued to Vista Outdoor stockholders in the Transaction as part of the Merger Consideration.
This proxy statement/prospectus contains important information about the Transaction. You should read it carefully and in its entirety.
Q:What are the transactions described in this proxy statement/prospectus?
A:On October 15, 2023, Vista Outdoor entered into the Merger Agreement with Revelyst, Merger Sub Parent, Merger Sub and, solely for the purposes of specific provisions therein, CSG. Simultaneously with the signing of the Merger Agreement, Vista Outdoor and Revelyst entered into the Separation Agreement. Pursuant to the Merger Agreement and the Separation Agreement, the following transactions will be consummated, in each case on the terms and subject to the conditions set forth therein:
Internal Transactions.  Vista Outdoor and certain of Vista Outdoor’s subsidiaries will engage in a series of internal transactions to separate the Revelyst Business from the Sporting Products Business. See “The TransactionStructure of the Transaction—Internal Transactions” and “Separation Agreement—Transfer of Assets and Assumption of Liabilities” beginning on pages 72 and 161, respectively.
Subscription.  Immediately following the completion of the Internal Transactions, Merger Sub Parent will contribute the Subscription Amount to Vista Outdoor in exchange for shares of Vista Outdoor Common Stock (the “Subscription”). See “The TransactionStructure of the TransactionSubscription” beginning on page 72.
Contribution.  Immediately following the Subscription, Vista Outdoor will contribute the Contribution Amount and the Revelyst Business to Revelyst, and, in exchange, Revelyst will issue shares of Revelyst
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Common Stock to Vista Outdoor. See “The TransactionStructure of the TransactionContribution” beginning on page 73.
Merger.  Immediately following the Contribution, Merger Sub will merge with and into Vista Outdoor with Vista Outdoor surviving the merger as a wholly owned subsidiary of Merger Sub Parent. At the Effective Time, each share of Vista Outdoor Common Stock issued and outstanding immediately prior to the Effective Time (other than (i) any such shares of Vista Outdoor Common Stock held by Vista Outdoor, its subsidiaries or Merger Sub Parent and (ii) any Appraisal Shares) will be converted into the right to receive the Merger Consideration. See “The TransactionStructure of the TransactionMerger” and “The Merger Agreement—The Merger” beginning on pages 73 and 134, respectively.
Following the closing of the Transaction, Revelyst, holding only the Revelyst Business, will be an independent, publicly traded company, and Vista Outdoor, holding only the Sporting Products Business, will be a wholly owned subsidiary of CSG.
It is expected that there will be approximately [          ] shares of Revelyst Common Stock outstanding immediately after the consummation of the Transaction (based on approximately [          ] shares of Vista Outdoor Common Stock outstanding as of [          ]). The actual number of shares of Revelyst Common Stock will depend on the total number of shares of Vista Outdoor Common Stock outstanding immediately prior to the Effective Time. Revelyst intends to file an application to list the Revelyst Common Stock on the NYSE under the ticker symbol “GEAR”.
Q:What is happening to the previously announced plan to separate Vista Outdoor’s Outdoor Products and Sporting Products segments into two independent, publicly-traded companies via a spin-off of the Outdoor Products segment (the “Spin-Off”)?
A:The Vista Outdoor Board has determined that it is in the best interests of Vista Outdoor stockholders to consummate the Transaction in lieu of the Spin-Off. Following the consummation of the Transaction, Revelyst will be an independent, publicly traded company (as it would have been following the Spin-Off), and Vista Outdoor will be a wholly owned subsidiary of CSG (whereas Vista Outdoor would have remained an independent, publicly traded company following the Spin-Off). For more information about the Vista Outdoor Board’s decision to pursue the Transaction in lieu of the Spin-Off, see the section entitled “The Transaction—Recommendation of the Vista Outdoor Board; The Vista Outdoor Board’s Reasons for the Transaction” beginning on page 94.
Q:Will the Internal Transactions, the Subscription, the Contribution and the Merger occur on the same day?
A:Yes. The Internal Transactions, the Subscription, the Contribution and the Merger are expected to occur on the same day, with each step taking place immediately following the completion of the prior step.
Q:What is the rationale for the Transaction structure?
A:The structure of the Transaction is expected to result in corporate level tax of approximately $50 million versus approximately $380 million for a divestiture of the assets of the Sporting Products Business and allows for the tax-efficient return of cash to Vista Outdoor stockholders. For information about the material U.S. federal income tax consequences resulting from the Transaction, see “Material U.S. Federal Income Tax Consequences” beginning on page 127.
Q:Is the closing of the Transaction subject to any conditions?
A:Yes. The respective obligations of each party to effect the Merger, and the respective obligations of Vista Outdoor and Merger Sub Parent to effect the Subscription, are subject to the satisfaction (or, to the extent permitted by applicable law, waiver) of certain conditions specified in the Merger Agreement, including, among other things: (i) the approval of the Vista Outdoor stockholders; (ii) any waiting period (or any extension thereof) applicable to the Transaction under the HSR Act having been terminated or having
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expired, approval from the Committee on Foreign Investment in the United States (“CFIUS”) having been received and approval under the United Kingdom National Security and Investment Act 2021 having been received; (iii) the absence of legal restraints prohibiting the Transaction; (iv) the completion of certain actions required to be taken pursuant to the Separation Agreement prior to consummation of the Merger; (v) the registration statement of which this proxy statement/prospectus forms a part having become effective under the Securities Act and not being the subject of any stop order; (vi) the shares of Revelyst Common Stock to be distributed in connection with the Merger having been approved for quotation on the New York Stock Exchange, subject to official notice of issuance, and (vii) other customary conditions specified in the Merger Agreement. See “Merger Agreement—Conditions Precedent” beginning on page 156.
Each party to the Merger Agreement may, to the extent permitted by law, waive any condition that is a condition to the obligations of such party to effect the Merger and/or to effect the Subscription. Conditions that are required by law (such as (i) the approval of the Vista Outdoor stockholders, (ii) any waiting period (or any extension thereof) applicable to the Transaction under the HSR Act having been terminated or having expired, approval from CFIUS having been received and approval under the United Kingdom National Security and Investment Act 2021 having been received, (iii) the absence of legal restraints prohibiting the Transaction and (iv) the registration statement of which this proxy statement/prospectus forms a part having become effective under the Securities Act and not being the subject of any stop order) may not be waived. If the applicable party or parties were to waive a closing condition that may be waived, such waiver could have an adverse effect on Vista Outdoor stockholders and/or Revelyst. See “Risk Factors—Risks Related to the Transaction—The consummation of the Transaction is subject to a number of conditions, many of which are largely outside of the control of the parties to the Merger Agreement, and, if these conditions are not satisfied or waived on a timely basis, the Merger Agreement may be terminated and the Transaction may not be completed. If any closing conditions are waived, such waiver could have an adverse effect on Vista Outdoor stockholders and/or Revelyst” beginning on page 37.
Q:How will the Transaction be financed?
A:CSG’s obligation to pay the Subscription Amount is supported by $1.11 billion of fully committed debt financing, with the remaining amount to be funded by CSG. See “Description of Debt Financing” beginning on page 132.
Q:What consideration will Vista Outdoor stockholders receive if the Transaction is completed?
A:At the Effective Time, each share of Vista Outdoor Common Stock issued and outstanding immediately prior to the Effective Time (other than (i) any such shares of Vista Outdoor Common Stock held by Vista Outdoor, its subsidiaries or Merger Sub Parent and (ii) any Appraisal Shares) will be converted into the right to receive (a) one fully paid and non-assessable share of Revelyst Common Stock and (b) $12.90 in cash, in each case, per share of Vista Outdoor Common Stock.
At the time of the Closing, after giving effect to the contribution from Vista Outdoor and following the payment of taxes, transaction costs and other customary closing-related payments, Revelyst expects to have cash and cash equivalents of approximately $400 million. After the Closing, Revelyst expects to return cash on hand that is in excess of $250 million to Revelyst stockholders in the form of a share buyback or a special dividend.
Q:How will Vista Outdoor stockholders receive the Merger Consideration to which they are entitled?
A:Vista Outdoor and Revelyst will appoint Computershare Trust Company, N.A. (or one of its affiliates), or another bank or trust company reasonably approved by Merger Sub Parent, to act as agent for the distribution of the Merger Consideration (the “Exchange Agent”).
As promptly as practicable after the Effective Time, Vista Outdoor will cause the Exchange Agent to mail to each holder of record of shares of Vista Outdoor Common Stock a letter of transmittal, inclusive of an exchange website URL and exchange website login credentials with respect to exchanging shares of Vista Outdoor Common Stock for the Merger Consideration. It is up to the stockholders to determine if they
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would like to exchange their Vista Outdoor Common Stock by using either (1) the hardcopy letter of transmittal that was mailed to them by returning it, along with the applicable W-8/W-9 form where applicable or (2) logging into the exchange website to complete their exchange. Please note, in the instance where stockholders hold physical stock certificate(s), stockholders must surrender their physical stock certificate(s) either when presenting their letter of transmittal by mail or in the case of the exchange website, stockholders must surrender their physical stock certificate(s) before their exchange has been processed. It is recommended that stockholders return their physical stock certificate(s) by trackable mail, return receipt requested, using the Exchange Agent’s street address on the letter of transmittal and reflected on the exchange website.
Upon, in the case of shares of Vista Outdoor Common Stock represented by a certificate, the surrender of such certificate for cancellation to the Exchange Agent, or, in the case of shares of Vista Outdoor Common Stock held in book-entry form, the receipt of an “agent’s message” by the Exchange Agent, in each case together with the letter of transmittal or using the exchange website, duly, completely and validly executed in accordance with the instructions thereto, and such other documents as may reasonably be required by the Exchange Agent, the holder of such shares of Vista Outdoor Common Stock will be entitled to receive in exchange the Merger Consideration and any dividends or other distributions declared or made with respect to any shares of Revelyst Common Stock with a record date after the Effective Time. If you hold non-certificated book-entry shares of Vista Outdoor Common Stock through the Depository Trust Company (“DTC”), you will not be required to deliver a stock certificate or letter of transmittal, and you will instead receive your cash payment after the Exchange Agent receives the documents requested in the applicable instruction from DTC.
The Exchange Agent may charge holders an administrative fee for processing payment with respect to the Certificate (as defined in the section entitled “Merger Agreement—Exchange Matters” beginning on page 135) represented by lost certificates, which shall be charged only once in instances where a single surety bond obtained covers multiple certificates in a single account.
With respect to registered stockholders, if you hold your shares of Vista Outdoor Common Stock outside of DTC, upon exchange of your shares of Vista Outdoor Common Stock, a check will be issued for your cash entitlement and your new shares of Revelyst Common Stock will be issued electronically, in book-entry form. A corporate actions advice will be mailed to you reflecting your new shares.
See “Merger Agreement—Exchange Matters” beginning on page 138 for a more detailed description of the procedures that will apply to the distribution of the Merger Consideration.
Q:What happens if a Vista Outdoor stockholder’s stock certificate gets lost, stolen or is otherwise destroyed?
A:With respect to any holder of any Certificate that cannot be located due to the theft, loss or destruction of such Certificate, upon the Exchange Agent’s receipt from such stockholder of (a) an affidavit of such theft, loss or destruction, (b) an open penalty surety bond in form and substance satisfactory to the Exchange Agent and (c) payment of all applicable fees, the Exchange Agent will make payment of the Merger Consideration and will issue the new shares of Revelyst Common Stock to the former stockholder as though the Certificate had been surrendered. The Exchange Agent may charge holders an administrative fee for processing payment with respect to the Certificate represented by lost certificates, which shall be charged only once in instances where a single surety bond obtained covers multiple certificates in a single account.
Q:How will the rights of Vista Outdoor stockholders change after the Transaction?
A:Following the closing of the Transaction, former Vista Outdoor stockholders will hold shares of Revelyst Common Stock and no longer have any ownership interest in Vista Outdoor. Revelyst will be an independent, publicly traded company holding only the Revelyst Business. Revelyst intends to file an application to list the Revelyst Common Stock on the NYSE under the ticker symbol “GEAR”. Vista Outdoor will be a wholly owned subsidiary of CSG holding only the Sporting Products Business, and Vista Outdoor Common Stock will no longer be traded on the NYSE. See “Comparison of the Rights of Vista
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Q:What will be the relationship among Vista Outdoor, CSG and Revelyst after the closing of the Transaction?
A:Following the closing of the Transaction, Revelyst will be an independent, publicly traded company holding only the Revelyst Business, and Vista Outdoor will be a wholly owned subsidiary of CSG holding only the Sporting Products Business.
In connection with the Transaction, Vista Outdoor and Revelyst have entered into and will enter into several other agreements to provide for the allocation of assets and liabilities between Vista Outdoor and Revelyst and to govern the relationship between Vista Outdoor and Revelyst following the Closing, including with respect to employee matters and transition services. For a more complete discussion of the agreements related to the Transaction, see “Merger Agreement,” “Separation Agreement” and “Additional Transaction Agreements” beginning on pages 134, 161 and 168, respectively.
Q:What are the material U.S. federal income tax consequences to Vista Outdoor stockholders from the Transaction?
A:The receipt of Revelyst Common Stock and cash in respect of Vista Outdoor Common Stock pursuant to the Transaction will be a taxable transaction for U.S. federal income tax purposes for Vista Outdoor stockholders. Therefore, generally, a U.S. Holder (as defined in the section entitled “Material U.S. Federal Income Tax Consequences” beginning on page 127) will recognize capital gain or loss equal to the difference between (i) such U.S. Holder’s adjusted tax basis in its Vista Outdoor Common Stock and (ii) the fair market value of the Revelyst Common Stock and cash received in exchange for Vista Outdoor Common Stock pursuant to the Transaction. A U.S. Holder’s adjusted tax basis in its Vista Outdoor Common Stock will generally equal such U.S. Holder’s purchase price for such Vista Outdoor Common Stock.
Except in certain circumstances, a Non-U.S. Holder (as defined in the section entitled “Material U.S. Federal Income Tax Consequences” beginning on page 127) will not be subject to U.S. federal income or withholding tax on the exchange of Vista Outdoor Common Stock for Revelyst Common Stock and cash in the Transaction.
The tax consequences to Vista Outdoor stockholders of the Transaction may depend on a holder’s particular circumstances. Vista Outdoor stockholders should read the discussion in the section entitled “Material U.S. Federal Income Tax Consequences” beginning on page 127 for a more detailed description of the U.S. federal income tax consequences of the Transaction and should consult their own tax advisors for a full understanding of the tax consequences to them of the Transaction.
Q:What will happen to outstanding Vista Outdoor equity awards held by Revelyst Employees in connection with the Transaction?
A:Outstanding Vista Outdoor equity awards held by any employee of the Revelyst Group as of immediately prior to the Effective Time (including any employee transferred to the Revelyst Group as of immediately prior to the Effective Time) (each, a “Revelyst Employee”) or any non-employee director of Vista Outdoor as of immediately prior to the Effective Time who, immediately following the Effective Time, becomes a non-employee director of Revelyst (each, a “Continuing Non-Employee Director”) will be treated as follows as of immediately prior to the Effective Time:
Restricted Stock Unit Awards. Each Vista Outdoor restricted stock unit award (each, a “Vista Outdoor RSU”) held as of immediately prior to the Effective Time by any Revelyst Employee or any Continuing Non-Employee Director will be converted immediately prior to the Effective Time into a Revelyst restricted stock unit award (each, a “Substitute Revelyst RSU Award”) based on the number of shares subject to such award multiplied by the Revelyst Conversion Ratio. After the Closing, each such Substitute Revelyst RSU
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Award will be subject to substantially the same terms and conditions as the original Vista Outdoor RSU Award to which it relates, and the vesting of the award will be based on continued service with Revelyst.
Performance-Based Restricted Stock Unit Awards. Each Vista Outdoor performance-based restricted stock unit award (each, a “Vista Outdoor PSU Award”) held as of immediately prior to the Effective Time by any Revelyst Employee, other than each Specified Vista Outdoor PSU Award (as defined below), will be converted immediately prior to the Effective Time into a Substitute Revelyst RSU Award based on the number of shares subject to such award multiplied by the Revelyst Conversion Ratio, with performance conditions deemed achieved as of the Closing Date, as applicable, at (i) 100% of target performance, in respect of fiscal years 2022-2024 and 2024-2026 awards and special retention Vista Outdoor PSU Awards granted in fiscal year 2023 to certain executive officers of Vista Outdoor in recognition of the extraordinary level of work required by each of them to accomplish the separation of Revelyst from Vista Outdoor (the “Special Retention PSUs”) and (ii) 33.33% of target performance, in respect of fiscal year 2023-2025 awards. After the Closing, each such Substitute Revelyst RSU Award will be subject to substantially the same terms and conditions as the original Vista Outdoor PSU Award to which it relates, except as provided above, and the vesting of the award will be based on continued service with Revelyst.
Each Vista Outdoor performance-based restricted stock unit award set forth on a schedule (each, a “Specified Vista Outdoor PSU Award”) held as of immediately prior to the Effective Time by any Revelyst Employee will be converted immediately prior to the Effective Time into a Revelyst performance-based restricted stock unit award (each, a “Substitute Revelyst PSU Award”) based on the target number of shares subject to such award multiplied by the Revelyst Conversion Ratio. After the Closing, each such Substitute Revelyst PSU Award will be subject to substantially the same terms and conditions, including performance conditions and vesting schedule, as the Specified Vista Outdoor PSU Award to which it relates.
Stock Option Awards. Each Vista Outdoor stock option award (each, a “Vista Outdoor Option”) held as of immediately prior to the Effective Time, whether vested or unvested, by any Revelyst Employee will be converted immediately prior to the Effective Time into a Revelyst stock option award (each, a “Substitute Revelyst Option Award”) based on the number of shares subject to such award multiplied by the Revelyst Conversion Ratio and with an exercise price that preserves the fair value of the award following the Transaction. After the Closing, each such Substitute Revelyst Option Award will be subject to substantially the same terms and conditions as the original Vista Outdoor Option to which it relates, and the vesting of the award will be based on continued service with Revelyst.
Deferred Stock Unit Awards. Each Vista Outdoor deferred stock unit award (each, a “Vista Outdoor DSU Award”) held by a Continuing Non-Employee Director as of immediately prior to the Effective Time will be converted immediately prior to the Effective Time into a Revelyst deferred stock unit award (each, a “Substitute Revelyst DSU Award”) based on the number of shares subject to such award multiplied by the Revelyst Conversion Ratio. After the Closing, each such Substitute Revelyst DSU Award will be subject to substantially the same terms and conditions as the original Vista Outdoor award to which it relates, and the vesting of the award will be based on continued service with Revelyst.
See “Merger Agreement—Adjustments in Respect of Equity Awards; Treatment of Employee Stock Purchase Plan” beginning on page 136 for a more detailed description of the treatment of Vista Outdoor equity awards in the Transaction.
Q:What will happen to outstanding Vista Outdoor equity awards held by Sporting Products Employees in connection with the Transaction?
A:Outstanding Vista Outdoor equity awards held by any employee of Vista Outdoor who is not a Revelyst Employee as of immediately prior to the Effective Time (including any employee transferred to Vista Outdoor as of immediately prior to the Effective Time) (each, a “Sporting Products Employee”) (including, solely for this purpose, each former employee of Vista Outdoor prior to the Closing) or any non-employee director of Vista Outdoor as of immediately prior to the Effective Time who is not a Continuing Non-
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Employee Director (each, a “Non-Continuing Non-Employee Director”) will be treated as follows as of the Effective Time:
Restricted Stock Unit Awards. At the Effective Time, each Vista Outdoor RSU Award held by a Sporting Products Employee or a Non-Continuing Non-Employee Director will vest and be canceled in exchange for a lump-sum cash payment equal to the Vista Outdoor Pre-Closing Stock Price.
Performance-Based Restricted Stock Unit Awards. At the Effective Time, each Vista Outdoor PSU Award held by a Sporting Products Employee will vest and be canceled in exchange for a lump-sum cash payment equal to the Vista Outdoor Pre-Closing Stock Price, with performance criteria, as applicable, deemed achieved as follows: (i) 100% of target performance, in respect of fiscal years 2022-2024 and 2024-2026 awards and Special Retention PSUs and (ii) 33.33% of target performance, in respect of fiscal year 2023-2025 awards.
Stock Option Awards. At the Effective Time, each Vista Outdoor Option held by a Sporting Products Employee, whether vested or unvested, will be canceled in exchange for a lump-sum cash payment equal to the difference between the Vista Outdoor Pre-Closing Stock Price and the exercise price per share of the Vista Outdoor Option.
Deferred Stock Unit Awards. At the Effective Time, each Vista Outdoor DSU Award held by a Non-Continuing Non-Employee Director, whether vested or unvested, will be canceled in exchange for the right to receive a cash payment equal to the Vista Outdoor Pre-Closing Stock Price.
See “Merger Agreement—Adjustments in Respect of Equity Awards; Treatment of Employee Stock Purchase Plan” beginning on page 136 for a more detailed description of the treatment of Vista Outdoor equity awards in the Transaction.
Q:What will happen to the Vista Outdoor Employee Stock Purchase Plan?
A:Beginning on the date of the Merger Agreement, no Offering Period (as defined in the Vista Outdoor Employee Stock Purchase Plan (the “Vista Outdoor ESPP”)) under the Vista Outdoor ESPP will commence, no new participants may join the Vista Outdoor ESPP during the then existing Offering Period (such period, the “Existing Offering Period”) and no participant may increase the amount of his or her payroll deductions with respect to the Existing Offering Period. If the Effective Time occurs prior to the end of the Existing Offering Period, all participant contributions under the Vista Outdoor ESPP will be used to purchase shares of Vista Outdoor Common Stock two Business Days prior to the Effective Time in accordance with the terms of the Vista Outdoor ESPP as if it was the last day of the Existing Offering Period.
The Vista Outdoor ESPP will terminate in its entirety on the Closing Date and no further rights will be granted or exercised under the Vista Outdoor ESPP thereafter.
See “Merger Agreement—Adjustments in Respect of Equity Awards; Treatment of Employee Stock Purchase Plan” beginning on page 136 for a more detailed description of the treatment of the Vista Outdoor ESPP in the Transaction.
Q:Do any of Vista Outdoor’s directors or executive officers have any interests in the Transaction that are different from, or in addition to, my interests as a Vista Outdoor stockholder?
A:In considering the Proposals to be voted on at the Special Meeting, you should be aware that Vista Outdoor’s directors and executive officers have financial interests in the Transaction that may be different from, or in addition to, your interests as a Vista Outdoor stockholder. The members of the Vista Outdoor Board were aware of and considered these interests in reaching the determination to approve the Merger
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Proposal and to recommend that Vista Outdoor stockholders approve the Merger Proposal. These interests include:
the treatment of Vista Outdoor’s equity awards provided for under the Merger Agreement and the Employee Matters Agreement (as described in “Merger Agreement—Adjustments in Respect of Equity Awards; Treatment of Employee Stock Purchase Plan” beginning on page 136);
severance and other benefits payable in the case of certain qualifying terminations of employment under the terms of individual employment agreements or Vista Outdoor’s benefit plans;
the potential to receive an annual bonus for the post-Closing portion of the fiscal year in which the Closing occurs at the greater of threshold or actual performance levels;
the potential to receive cash-based retention awards under a program established for the benefit of certain Sporting Products Employees; and
continued indemnification and insurance coverage under the Merger Agreement, Vista Outdoor’s organizational documents and any indemnification agreements Vista Outdoor has entered into with its directors and executive officers.
These interests are described in more detail, and certain of them are quantified, in the section entitled “The Transaction—Interests of Vista Outdoor Directors and Executive Officers in the Transaction” beginning on page 114.
Q:Does Vista Outdoor have to pay anything to CSG if the Merger Agreement is terminated?
A:Vista Outdoor is required to pay a termination fee of $47.75 million to CSG if the Merger Agreement is terminated under certain circumstances. For a discussion of the circumstances under which the termination fee is payable by Vista Outdoor, see “Merger Agreement—Termination, Amendment, Extension and Waiver—Termination Fees” beginning on page 157.
Q:Does CSG have to pay anything to Vista Outdoor if the Merger Agreement is terminated?
A:CSG is required to pay a termination fee of $114.6 million to Vista Outdoor if the Merger Agreement is terminated under certain circumstances. For a discussion of the circumstances under which the termination fee is payable by CSG, see “Merger Agreement—Termination, Amendment, Extension and Waiver—Termination Fees” beginning on page 157.
Q:Are there risks associated with the Transaction?
A:Yes. Vista Outdoor and Revelyst may not realize the expected benefits of the Transaction because of the risks and uncertainties discussed in the section entitled “Risk Factors” beginning on page 37 and the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 64.
Q:Can Vista Outdoor stockholders demand appraisal of their shares in connection with the Transaction?
A:Subject to the Closing, Vista Outdoor stockholders who do not vote in favor of the approval of the Merger Proposal and who otherwise comply with the procedures and satisfy the conditions set forth in Section 262 of the DGCL (“Section 262”) are entitled to appraisal rights under Section 262. For more information regarding appraisal rights, see the section entitled “The Transaction—Appraisal Rights” beginning on page 123. Failure to strictly comply with Section 262 may result in your waiver of, or inability to, exercise appraisal rights.
Q:When will the Transaction be completed?
A:The Transaction is currently expected to close in calendar year 2024, subject to approval by Vista Outdoor stockholders, receipt of necessary regulatory approvals and the satisfaction or waiver of other closing
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conditions set forth in the Merger Agreement. See “Merger Agreement—Conditions Precedent” beginning on page 156.
Q:What happens if the Transaction is not completed?
A:If the Merger Proposal is not approved by Vista Outdoor stockholders or any of the other conditions to the Transaction are not satisfied or waived for any reason, the Transaction will not occur and Vista Outdoor stockholders will continue to hold shares of Vista Outdoor Common Stock. Vista Outdoor will remain an independent public company, Vista Outdoor Common Stock will continue to be listed and traded on the NYSE and registered under the Exchange Act and Vista Outdoor will continue to file periodic reports with the SEC. Under certain circumstances, Vista Outdoor may be required to pay a termination fee to CSG, or CSG may be required to pay a termination fee to Vista Outdoor. See “Merger Agreement—Termination, Amendment, Extension and Waiver—Termination Fees” beginning on page 157.
Q:Who will serve on the Revelyst Board following the closing of the Transaction?
A:At the Closing, the Revelyst Board is expected to consist of eight members: Michael Callahan, Gerard Gibbons, Bruce Grooms, Gary L. McArthur, Eric Nyman, Michael D. Robinson, Robert M. Tarola and Lynn Utter. For more information regarding Revelyst’s directors and management, see “Revelyst Management” beginning on page 215.
Q:Who will manage Revelyst following the closing of the Transaction?
A:Revelyst is expected to be led by Eric Nyman, as Revelyst’s Chief Executive Officer. Andrew J. Keegan is expected to serve as Revelyst’s Chief Financial Officer, Jung Choi is expected to serve as Revelyst’s General Counsel and Corporate Secretary and Joyce Butler is expected to serve as Revelyst’s Chief Human Resources Officer. For more information regarding Revelyst’s directors and management, see “Revelyst Management” beginning on page 215.
Q:Does Revelyst intend to pay cash dividends?
A:Revelyst intends to retain future earnings for use in the operation of its business and to fund future growth, including through acquisitions. Revelyst does not anticipate paying any regular dividends on its common stock for the foreseeable future. See “Historical Market Price and Dividend Information—Revelyst Dividend Policy” beginning on page 36.
Q:Will Revelyst incur any debt prior to or at the time of the Transaction?
A:In connection with the Transaction, Revelyst expects to enter into a revolving credit facility. Revelyst has not yet entered into such contemplated revolving credit facility and, accordingly, the terms of the revolving credit facility have not yet been finally determined.
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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND VOTING
The following questions and answers are intended to address questions that you, as a stockholder of Vista Outdoor, may have regarding the Special Meeting with respect to the Transaction. These questions and answers highlight only some of the information contained in this proxy statement/prospectus. Vista Outdoor urges you to read carefully the entire proxy statement/prospectus and the documents incorporated by reference into this proxy statement/prospectus in addition to these questions and answers. See the section entitled “Where You Can Find Additional Information” beginning on page i of this proxy statement/prospectus.
Q:What is this proxy statement/prospectus and why am I receiving it?
A:This proxy statement/prospectus is part of a solicitation of proxies by the Vista Outdoor Board for the Special Meeting and is being provided to Vista Outdoor stockholders and beneficial owners of Vista Outdoor Common Stock on or about [          ], 2024. This proxy statement/prospectus provides Vista Outdoor stockholders with information relating to their decisions to vote, grant a proxy to vote, attend and, if relevant, instruct their vote to be cast, at the Special Meeting.
You are receiving these materials because you are a stockholder of record or beneficial owner of Vista Outdoor Common Stock as of the Record Date for the Special Meeting. This proxy statement/prospectus serves as the proxy statement through which the Vista Outdoor Board will solicit proxies to obtain the necessary stockholder approval with respect to each of the Proposals in connection with the Transaction. Vista Outdoor is holding the Special Meeting to obtain such approval. This proxy statement/prospectus contains important information about the Transaction and the Special Meeting, and you should read it carefully and in its entirety.
Q:What proposals will be considered at the Special Meeting?
A:The Special Meeting is being held for Vista Outdoor stockholders to vote on the approval of the following matters relating to the Transaction:
A proposal to adopt the Merger Agreement, a copy of which is attached as Annex A to this proxy statement/prospectus;
A proposal to approve, by advisory (non-binding) vote, the compensation that may be paid or become payable to Vista Outdoor’s named executive officers in connection with the consummation of the Merger; and
A proposal to approve adjournments of the Special Meeting (i) to the extent necessary to ensure that any required supplement or amendment to this proxy statement/prospectus is provided to the Vista Outdoor stockholders within a reasonable amount of time in advance of the Special Meeting, (ii) to the extent required by a court of competent jurisdiction, (iii) if there are insufficient shares of Vista Outdoor Common Stock represented to constitute a quorum necessary to conduct the business of the Special Meeting or (iv) to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Merger Proposal.
Q:How does the Vista Outdoor Board recommend that I vote?
A:The Vista Outdoor Board recommends that the Vista Outdoor stockholders vote “FOR” the Merger Proposal, “FOR” the Advisory Compensation Proposal and “FOR” the Adjournment Proposal.
Q:Who is entitled to vote at the Special Meeting?
A:All Vista Outdoor stockholders of record as of the Record Date are entitled to vote at the Special Meeting.
Q:What is the quorum requirement for the Special Meeting?
A:To conduct business at the Special Meeting, a quorum must be present. A quorum will be present if the holders of a majority of the outstanding shares of Vista Outdoor Common Stock entitled to vote as of the Record Date are present or represented by proxy at the Special Meeting. Abstentions are counted for purposes of establishing
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a quorum. On the Record Date, there were [          ] shares of Vista Outdoor Common Stock outstanding and entitled to vote. This does not include [          ] shares of Vista Outdoor Common Stock that were held in Vista Outdoor’s treasury and cannot be voted. Each share of Vista Outdoor Common Stock is entitled to one vote. There was no class of voting securities of Vista Outdoor outstanding on the Record Date other than the Vista Outdoor Common Stock.
Q:When and where will the Special Meeting be held?
A:The Special Meeting will be held virtually on [          ], 2024 at [          ] Central Time (CT).
Q:How can I attend the Special Meeting and vote my shares of Vista Outdoor Common Stock online at the Special Meeting?
A:Vista Outdoor stockholders of record as of the Record Date can attend the virtual Special Meeting by accessing the meeting center at www.virtualshareholdermeeting.com/VSTO2024SM and entering the 16-digit control number on their proxy card. Instructions on how to connect to the Special Meeting and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at www.proxyvote.com.
Beneficial Vista Outdoor stockholders as of the Record Date (i.e., Vista Outdoor stockholders who hold shares in “street name” through an intermediary, such as a bank or broker), who wish to attend the Special Meeting may attend using the 16-digit control number found on the notice and instructions received from their bank, broker or other financial intermediary.
Once admitted to the Special Meeting, you will be able to vote your shares electronically and submit any questions during the meeting.
Even if you plan to attend the Special Meeting online, Vista Outdoor recommends that you also submit your proxy or voting instructions as described below in “—How can I vote my shares of Vista Outdoor Common Stock without attending the virtual Special Meeting?” beginning on page 11 in advance of the Special Meeting so that your vote will be counted if you later decide not to attend the Special Meeting.
Q:How can I vote my shares of Vista Outdoor Common Stock without attending the virtual Special Meeting?
A:If you hold your shares of Vista Outdoor Common Stock directly, you may vote by granting a proxy by one of the following methods:
On the Internet – You may vote online at www.proxyvote.com by following the instructions provided in your proxy card. Voting on the Internet has the same effect as voting by mail. If you vote on the Internet, you do not need to return a proxy card by mail. Internet voting will be available until 11:59 PM Eastern Time (ET) on [          ], 2024.
By Telephone – You may vote by telephone by dialing 1-800-690-6903. Voting by telephone has the same effect as voting by mail. If you vote by telephone, you do not need to return a proxy card by mail. Telephone voting will be available until 11:59 PM Eastern Time (ET) on [          ], 2024.
By Mail – You may vote by signing and dating each proxy card that you receive and returning it in the prepaid envelope by [          ], 2024. Sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as an attorney-in-fact, executor, administrator, guardian, trustee or the officer or agent of a corporation or partnership), please indicate your name and your title or capacity. If the Vista Outdoor Common Stock is held in custody for a minor (for example, under the Uniform Transfers to Minors Act), the custodian should sign, not the minor. If the Vista Outdoor Common Stock is held in joint ownership, one owner may sign on behalf of all owners.
If you are the beneficial owner of shares of Vista Outdoor Common Stock held in “street name”, you may instruct your bank, broker or other financial intermediary to vote your shares of Vista Outdoor Common Stock by following the instructions provided by your bank, broker or other financial intermediary. Most intermediaries offer voting by mail, by telephone and on the Internet.
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Q:May I change or revoke my vote?
A:Yes. You may change or revoke your vote at any time before your proxy is voted at the Special Meeting. If you are a stockholder of record, you may change your vote by:
Voting over the Internet or by telephone at any time prior to 11:59 PM Eastern Time (ET) on [          ], 2024;
Signing and delivering to Vista Outdoor’s Corporate Secretary a written request to revoke your proxy vote prior to the Special Meeting that bears a date later than the date of the proxy you want to revoke and is received by Vista Outdoor’s Corporate Secretary prior to the Special Meeting;
Signing and mailing a new, properly completed proxy card with a later date than your original proxy card prior to the Special Meeting; or
Attending the virtual Special Meeting and voting your shares online at the Special Meeting. Your attendance at the virtual Special Meeting will not automatically revoke your proxy unless you properly vote your shares online at the Special Meeting.
If you are the beneficial owner of shares of Vista Outdoor Common Stock held in “street name”, you must instruct the bank, broker or other financial intermediary that holds your shares of Vista Outdoor Common Stock of record of your desire to change or revoke your voting instructions.
Q:How are shares of Vista Outdoor Common Stock voted?
A:Your shares of Vista Outdoor Common Stock will be voted as you instruct, assuming that you have properly voted over the Internet or by telephone or that your properly signed proxy card or voting instruction card is received in time to be voted at the Special Meeting.
If you are a Vista Outdoor stockholder of record and you properly submit your proxy with no voting instructions, your shares of Vista Outdoor Common Stock will be voted in accordance with the Vista Outdoor Board’s recommendation on each of the Proposals. See “—How does the Vista Outdoor Board recommend that I vote?” beginning on page 10 for more information.
If you are the beneficial owner of shares of Vista Outdoor Common Stock held in “street name” and you have not provided voting instructions to the bank, broker or other financial intermediary who holds your shares of Vista Outdoor Common Stock, such intermediary will not have discretionary authority to vote your shares of Vista Outdoor Common Stock in any of the Proposals. See “—What is a broker non-vote?” beginning on page 13 for more information.
Q:What vote is required to approve the Proposals?
A:Approval of the Merger Proposal requires the affirmative vote of holders of a majority of the outstanding shares of Vista Outdoor Common Stock entitled to vote thereon. If you fail to submit a valid proxy or vote at the Special Meeting, or vote to abstain on the Merger Proposal, or do not provide your bank, broker or other financial intermediary with instructions on the Merger Proposal, as applicable, this will have the same effect as a vote “AGAINST” the Merger Proposal.
Approval of the Advisory Compensation Proposal requires the affirmative vote of holders of a majority of the outstanding shares of Vista Outdoor Common Stock present or represented by proxy at the Special Meeting and voting thereon (excluding abstentions). If you fail to submit a valid proxy or vote at the Special Meeting, or vote to abstain on the Advisory Compensation Proposal, or do not provide your bank, broker or other financial intermediary with instructions on the Advisory Compensation Proposal, as applicable, this will have no effect on the outcome of the Advisory Compensation Proposal. Because the vote on the Advisory Compensation Proposal is advisory only, it will not be binding on the Vista Outdoor Board or Vista Outdoor. Accordingly, because Vista Outdoor is contractually obligated to pay the compensation that may be paid or become payable to Vista Outdoor’s named executive officers in connection with the consummation of the Transaction, if the
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Merger Proposal is approved by the Vista Outdoor stockholders, such compensation will be payable, subject only to the conditions applicable thereto, regardless of the outcome of the vote on the Advisory Compensation Proposal.
Approval of the Adjournment Proposal requires the affirmative vote of holders of a majority of the outstanding shares of Vista Outdoor Common Stock present or represented by proxy at the Special Meeting and voting thereon (excluding abstentions). If you fail to submit a valid proxy or vote at the Special Meeting, or vote to abstain on the Adjournment Proposal, or do not provide your bank, broker or other financial intermediary with instructions on the Adjournment Proposal, as applicable, this will have no effect on the outcome of the Adjournment Proposal.
Q:What happens if I abstain from voting?
A:If you submit a proxy and explicitly abstain from voting on any Proposal, the shares of Vista Outdoor Common Stock represented by the proxy will be considered present at the Special Meeting for the purpose of determining a quorum.
See “—What vote is required to approve the Proposals?” beginning on page 12 for information on the effect of an abstention on each Proposal.
Q:What is a broker non-vote?
A:A “broker non-vote” occurs when a broker submits a proxy that does not indicate a vote for one or more of the proposals because the broker has not received instructions from the beneficial owner on how to vote on such proposal(s) and does not have discretionary authority to vote in the absence of instructions. Brokers have discretionary authority to vote on matters that are deemed “routine.” Brokers do not have discretionary authority to vote on matters that are deemed “non-routine.” Each of the Proposals is a non-routine matter. As a result, if you do not provide voting instructions, your shares of Vista Outdoor Common Stock will not be voted on any Proposal. Broker non-votes will be counted for the purposes of determining whether a quorum exists at the Special Meeting. Broker non-votes will have the same effect as a vote “AGAINST” the Merger Proposal, but they will have no effect on the outcome of the Advisory Compensation Proposal or the Adjournment Proposal. See “—What vote is required to approve the Proposals?” beginning on page 12 for more information.
Q:Who will tabulate and certify the votes at the Special Meeting?
A:Broadridge Financial Solutions will tabulate the votes cast prior to the Special Meeting. The Carideo Group, Inc., a corporate inspector of elections services firm, will validate the votes cast at the Special Meeting and provide a final certification once all votes, both proxy ballots submitted prior to the Special Meeting and votes cast in person at the Special Meeting, have been tabulated.
Q:Are holders of shares of Vista Outdoor Common Stock entitled to appraisal rights?
A:Subject to the Closing, Vista Outdoor stockholders who do not vote in favor of the approval of the Merger Proposal and who otherwise comply with the procedures and satisfy the conditions set forth in Section 262 of the DGCL are entitled to appraisal rights thereunder. For more information regarding appraisal rights, see the section entitled “The Transaction—Appraisal Rights” beginning on page 123. Failure to strictly comply with Section 262 may result in your waiver of, or inability to exercise, appraisal rights.
Q:What does it mean if I receive more than one proxy card or voting instruction card?
A:It means your shares of Vista Outdoor Common Stock are registered differently or are held in more than one account. To ensure that all of your shares of Vista Outdoor Common Stock are voted, please vote once for each proxy card or voting instruction card you receive.
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Q:Where can I find the voting results of the Special Meeting?
A:Vista Outdoor will announce preliminary voting results during the Special Meeting and publish final results in a Current Report on Form 8-K following the Special Meeting.
Q:How will proxies be solicited and what is the cost?
A:Proxies are being solicited primarily by Internet and mail, but proxies may also be solicited personally, by telephone, facsimile and similar means. Vista Outdoor has retained Innisfree M&A Incorporated to assist in its solicitation of proxies and has agreed to pay them a fee of $50,000, plus certain fees and expenses, for these services. Vista Outdoor’s directors, officers and other employees may help with the solicitation without additional compensation. Vista Outdoor will reimburse brokers, banks and other custodians and nominees for their reasonable expenses in forwarding proxy solicitation materials to the owners of the shares of Vista Outdoor Common Stock they hold. Vista Outdoor will pay all other expenses of preparing, printing, and mailing or distributing the proxy solicitation materials.
Q:What other business may be brought before the Special Meeting?
A:The Vista Outdoor Board does not intend to present any other matters for a vote at the Special Meeting. In accordance with the Vista Outdoor Bylaws, the only business that may be conducted at a special meeting of Vista Outdoor stockholders is such business as shall have been brought before the meeting (i) pursuant to Vista Outdoor’s notice of meeting delivered in accordance with the Vista Outdoor Bylaws or (ii) by or at the direction of the Vista Outdoor Board.
Q:How are proxy materials delivered to Vista Outdoor stockholders who share the same household?
A:The rules of the SEC allow Vista Outdoor to deliver a single copy of an annual report or proxy statement, as applicable, to any household at which two or more Vista Outdoor stockholders reside. Vista Outdoor believes this rule, referred to as “householding”, benefits everyone. It eliminates duplicate mailings that Vista Outdoor stockholders living at the same address receive, and it reduces Vista Outdoor’s printing and mailing costs. This rule applies to any annual reports, proxy statements, proxy statements combined with a prospectus and information statements. If your household would like to receive duplicate rather than single mailings in the future, please write to Broadridge Investor Communications Solutions, Householding Department, 51 Mercedes Way, Edgewood, New York 11717, or call 800-542-1061.
Each Vista Outdoor stockholder will continue to receive a separate proxy card. If a broker or other nominee holds your shares, you may continue to receive some duplicate mailings. Certain brokers will eliminate duplicate account mailings by allowing stockholders to consent to such elimination, or through implied consent if a stockholder does not request continuation of duplicate mailings. Since not all brokers and nominees offer stockholders the opportunity to eliminate duplicate mailings, you may need to contact your broker or nominee directly to discontinue duplicate mailings from your broker to your household.
Your household may have received a single set of proxy materials. If you would like to receive another copy of the proxy materials, please write to Broadridge Investor Communications Solutions, Householding Department, 51 Mercedes Way, Edgewood, New York 11717, or call 800-542-1061.
Vista Outdoor will also undertake to deliver promptly, upon written or oral request, a separate copy to a Vista Outdoor stockholder at a shared address to which a single copy of the proxy materials was delivered.
You may make a written or oral request by sending a notification to Vista Outdoor’s Corporate Secretary, providing your name, your shared address, and the address to which Vista Outdoor should direct the additional copy of the proxy materials to: Corporate Secretary, Vista Outdoor Inc., 1 Vista Way, Anoka, MN 55303.
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Q:How many shares of Vista Outdoor Common Stock will Vista Outdoor’s directors and officers be entitled to vote at the Special Meeting? Do you expect them to vote in favor of the Proposals?
A:As of the close of business on [          ], 2024, the last practicable trading day for which information is available as of the date of this proxy statement/prospectus, approximately [          ]% of the outstanding shares of Vista Outdoor Common Stock were held by Vista Outdoor directors and executive officers and their affiliates. Vista Outdoor expects that Vista Outdoor’s directors and executive officers will vote their shares in favor of each of the Proposals, although none of them has entered into any agreements obligating him or her to do so.
Q:What will happen if the Proposals are not approved?
A:If the Merger Proposal is not approved, Vista Outdoor will not be able to consummate the Transaction.
The vote on the Advisory Compensation Proposal is a vote separate and apart from the vote to approve the Merger Proposal and is not a condition to consummation of the Transaction. Such vote is advisory only, meaning that it will not be binding on the Vista Outdoor Board or Vista Outdoor. Accordingly, because Vista Outdoor is contractually obligated to pay the compensation that may be paid or become payable to Vista Outdoor’s named executive officers in connection with the consummation of the Transaction, if the Merger Proposal is approved by the Vista Outdoor stockholders, such compensation will be payable, subject only to the conditions applicable thereto, regardless of the outcome of the vote on the Advisory Compensation Proposal.
The vote on the Adjournment Proposal is a vote separate and apart from the vote to approve the Merger Proposal and is not a condition to consummation of the Transaction.
Q:What happens if I transfer my shares of Vista Outdoor Common Stock before the Special Meeting?
A:The Record Date for the Special Meeting is earlier than the date of the Special Meeting. If you transfer your shares of Vista Outdoor Common Stock after the Record Date, you will retain your right to attend and vote at the Special Meeting. You will, however, have transferred the right to receive the Merger Consideration in the Merger. In order to receive the Merger Consideration, you must hold your shares of Vista Outdoor Common Stock through the Effective Time of the Merger.
Q:What do I need to do now?
A:Carefully read and consider the information contained in and incorporated by reference into this proxy statement/prospectus and vote your shares of Vista Outdoor Common Stock either by telephone, the Internet or the use of a proxy card, as described in these questions and answers and this proxy statement/prospectus.
Q:Who can help answer my questions?
A:If you have questions about the Transaction or the Proposals to be voted on at the Special Meeting, need assistance in completing your proxy card or if you desire additional copies of the document or additional proxy cards, you should contact:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor, New York, NY 10022
+1 (877) 750-9499 (toll free)
+1 (212) 750-5833 (banks and brokers)
Q:Where can I find more information about Vista Outdoor?
A:You can find more information about Vista Outdoor from various sources described in the section entitled “Where You Can Find Additional Information” beginning on page i.
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SUMMARY
This summary, together with the sections titled “Questions and Answers About the Transaction” and “Questions and Answers About the Special Meeting and Voting” beginning on pages 1 and 10, respectively, provide a summary of the material terms of the Transaction. These sections highlight selected information contained in this proxy statement/prospectus and may not include all the information that is important to you. You should read this entire proxy statement/prospectus carefully, including the annexes, as well as those additional documents referenced herein. See also “Where You Can Find Additional Information” beginning on page i.
The Companies (see “Information about Vista Outdoor” and “Information about the Revelyst Business” beginning on pages 170 and 171, respectively).
Vista Outdoor Inc.
1 Vista Way
Anoka, MN 55303
Vista Outdoor is a leading global designer, manufacturer and marketer of outdoor recreation and shooting sports products. Vista Outdoor is headquartered in Anoka, Minnesota and has manufacturing and distribution facilities in the United States, Canada, Mexico and Puerto Rico along with international customer service, sales and sourcing operations in Asia and Europe. Vista Outdoor has a robust global distribution network serving customers in over 100 countries. Vista Outdoor was incorporated in Delaware on April 24, 2014.
Vista Outdoor operates through two reportable segments: Sporting Products and Outdoor Products. The Sporting Products reportable segment designs, develops, distributes and manufactures ammunition, primers and components and serves devoted hunters, recreational shooters, federal and local law enforcement agencies and the military. The Outdoor Products reportable segment designs, develops, distributes and manufactures gear and equipment to a diverse range of outdoor enthusiasts around the world, including hikers, campers, cyclists, off-road riders, skiers, snowboarders, backyard grillers, golfers, anglers and hunters.
Revelyst, Inc.
c/o Vista Outdoor Inc.
1 Vista Way
Anoka, MN 55303
Revelyst was incorporated in Delaware on August 16, 2022 and is currently a wholly owned subsidiary of Vista Outdoor. Following the closing of the Transaction, Revelyst will be an independent, publicly traded company holding the Revelyst Business, and Vista Outdoor will no longer have any ownership interest in Revelyst. Revelyst intends to file an application to list the Revelyst Common Stock on the New York Stock Exchange under the ticker symbol “GEAR”. Revelyst will be headquartered in [          ].
CSG Elevate II Inc.
c/o CZECHOSLOVAK GROUP a.s.
Pernerova 691/42, CZ-186 00
Prague 8, Czech Republic
Merger Sub Parent was incorporated in Delaware on September 26, 2023, solely for the purpose of carrying out the Transaction. Merger Sub Parent has not carried on any activities to date, except for activities incidental to its
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formation and activities undertaken in connection with the Transaction. Merger Sub Parent is a wholly owned subsidiary of CSG.
CSG Elevate III Inc.
c/o CZECHOSLOVAK GROUP a.s.
Pernerova 691/42, CZ-186 00
Prague 8, Czech Republic
Merger Sub was incorporated in Delaware on September 26, 2023, solely for the purpose of carrying out the Transaction. Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Transaction. Merger Sub is a wholly owned subsidiary of Merger Sub Parent.
CZECHOSLOVAK GROUP a.s.
Pernerova 691/42, CZ-186 00
Prague 8, Czech Republic
CSG is an international industrial technology holding company building on the tradition of the Czech and Slovak industry, owned by Michal Strnad. CSG supports the development of Czech and Slovak companies engaged in defense and civil industrial production and trade, and it invests in and develops its member companies based in the Czech Republic, Slovakia, India, Italy, Serbia, Spain, the UK and the United States. More than 10,000 people are employed by CSG companies and affiliates. In 2022, the holding company’s consolidated revenues reached 25 billion CZK.
CSG operates across five strategic business segments covering aerospace, ammunition, defense, mobility and business projects. CSG’s products can be found on all continents thanks to the holding company’s strong pro-export orientation, and the number of its customers continues to grow. The predecessor to CSG, Excalibur Army spol. s r.o., was established in 1995.
The Transaction (see “The Transaction” beginning on page 72).
On October 15, 2023, Vista Outdoor entered into the Merger Agreement with Revelyst, Merger Sub Parent, Merger Sub and, solely for the purposes of specific provisions therein, CSG, pursuant to which, on the terms and conditions set forth therein and in accordance with the DGCL, Merger Sub will merge with and into Vista Outdoor with Vista Outdoor surviving the merger as a wholly owned subsidiary of Merger Sub Parent. Pursuant to the Separation Agreement entered into between Vista Outdoor and Revelyst simultaneously with the signing of the Merger Agreement, Vista Outdoor will effect a separation pursuant to which, among other things, the Revelyst Business will be separated from the Sporting Products Business and transferred to Revelyst. Prior to the consummation of the Merger, (i) pursuant to the Subscription Agreement, Merger Sub Parent will contribute the Subscription Amount to Vista Outdoor in exchange for shares of Vista Outdoor Common Stock and (ii) immediately thereafter, Vista Outdoor will contribute the Contribution Amount and the Revelyst Business to Revelyst. Following the completion of the foregoing, Merger Sub will merge with and into Vista Outdoor, with Vista Outdoor surviving the Merger and becoming a wholly owned subsidiary of Merger Sub Parent.
On the terms and subject to the conditions set forth in the Merger Agreement, which has been approved by the Vista Outdoor Board, at the Effective Time, each share of Vista Outdoor Common Stock issued and outstanding immediately prior to the Effective Time (other than (i) any such shares of Vista Outdoor Common Stock held by Vista Outdoor, its subsidiaries or Merger Sub Parent and (ii) any Appraisal Shares) will be converted into the right to receive (a) one fully paid and non-assessable share of Revelyst Common Stock and (b) $12.90 in cash, in each case, per share of Vista Outdoor Common Stock.
Following the closing of the Transaction, Revelyst, holding only the Revelyst Business, will be an independent, publicly traded company, and Vista Outdoor, holding only the Sporting Products Business, will be a wholly owned subsidiary of CSG.
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In connection with the Transaction, Vista Outdoor and Revelyst have entered into and will enter into several other agreements to provide for the allocation of assets and liabilities between Vista Outdoor and Revelyst and to govern the relationship between Vista Outdoor and Revelyst following the Closing, including with respect to employee matters and transition services. For a more complete discussion of the agreements related to the Transaction, see “Merger Agreement,” “Separation Agreement” and “Additional Transaction Agreements” beginning on pages 134, 161 and 168, respectively.
Conditions to the Transaction (see “Merger Agreement—Conditions Precedent” beginning on page 156).
The respective obligations of each party to effect the Merger, and the respective obligations of Vista Outdoor and Merger Sub Parent to effect the Subscription, are subject to the satisfaction (or, to the extent permitted by law, waiver) on or prior to the Closing Date of the following conditions:
receipt of an affirmative vote for the adoption of the Merger Agreement from the holders of a majority of the outstanding shares of Vista Outdoor Common Stock represented and entitled to vote thereon at the meeting of the Vista Outdoor stockholders held for the purpose of obtaining such approval, or any postponement, adjournment or recess thereof (the “Vista Outdoor Stockholder Approval”);
termination or expiry of any waiting period (and any extension thereof) applicable to the Transaction under the HSR Act, receipt of CFIUS approval and approval under the United Kingdom National Security and Investment Act 2021;
the absence of any law or judgment, order, injunction, ruling, writ, decree or other directive issued, promulgated or entered into by or with any governmental authority including any court of competent jurisdiction (each, a “Restraint”) that is still in effect and prohibits, enjoins or makes illegal the consummation of the Transaction;
completion of certain pre-Closing steps relating to the Separation in accordance with the Separation Agreement;
the registration statement on Form S-4 of which this proxy statement/prospectus forms a part having become effective under the Securities Act and not being the subject of any stop order; and
the shares of Revelyst Common Stock to be distributed in connection with the Merger being approved for quotation on the NYSE, subject to official notice of issuance.
In addition, (a) the respective obligations of Vista Outdoor, Revelyst, Merger Sub Parent and Merger Sub to effect the Merger, and the respective obligations of Vista Outdoor and Merger Sub Parent to effect the Subscription, are subject to the accuracy of certain representations and warranties made by the other parties in the Merger Agreement and the compliance by such other parties with their respective covenants in the Merger Agreement, in each case, subject to the materiality standards set forth in the Merger Agreement, and (b) the obligations of Merger Sub Parent and Merger Sub to effect the Merger, and the obligation of Merger Sub Parent to effect the Subscription, are further subject to the absence of a Vista Outdoor Material Adverse Effect (as defined in “Merger Agreement—Representations and Warranties” beginning on page 140).
For a more complete discussion of the conditions to the Transaction, see “Merger Agreement—Conditions Precedent” beginning on page 156.
Treatment of Outstanding Vista Outdoor Equity Awards (see “Merger Agreement—Adjustments in Respect of Equity Awards; Treatment of Employee Stock Purchase Plan” beginning on page 136).
Outstanding Vista Outdoor equity awards held by any Revelyst Employee or any Continuing Non-Employee Director will be treated as follows as of immediately prior to the Effective Time:
Restricted Stock Unit Awards. Each Vista Outdoor RSU Award held as of immediately prior to the Effective Time by any Revelyst Employee or any Continuing Non-Employee Director will be converted immediately prior to the Effective Time into a Substitute Revelyst RSU Award based on the number of
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shares subject to such award multiplied by the Revelyst Conversion Ratio. After the Closing, each such Substitute Revelyst RSU Award will be subject to substantially the same terms and conditions as the original Vista Outdoor RSU Award to which it relates, and the vesting of the award will be based on continued service with Revelyst.
Performance-Based Restricted Stock Unit Awards. Each Vista Outdoor PSU Award held as of immediately prior to the Effective Time by any Revelyst Employee, other than each Specified Vista Outdoor PSU Award, will be converted immediately prior to the Effective Time into a Substitute Revelyst RSU Award based on the number of shares subject to such award multiplied by the Revelyst Conversion Ratio, with performance conditions deemed achieved as of the Closing Date, as applicable, at (i) 100% of target performance, in respect of fiscal years 2022-2024 and 2024-2026 awards and Special Retention PSUs and (ii) 33.33% of target performance, in respect of fiscal year 2023-2025 awards. After the Closing, each such Substitute Revelyst RSU Award will be subject to substantially the same terms and conditions as the original Vista Outdoor PSU Award to which it relates, except as provided above, and the vesting of the award will be based on continued service with Revelyst.
Each Specified Vista Outdoor PSU Award held as of immediately prior to the Effective Time by any Revelyst Employee will be converted immediately prior to the Effective Time into a Substitute Revelyst PSU Award based on the target number of shares subject to such award multiplied by the Revelyst Conversion Ratio. After the Closing, each such Substitute Revelyst PSU Award will be subject to substantially the same terms and conditions, including performance conditions and vesting schedule, as the Specified Vista Outdoor PSU Award to which it relates.
Stock Option Awards. Each Vista Outdoor Option held as of immediately prior to the Effective Time, whether vested or unvested, by any Revelyst Employee will be converted immediately prior to the Effective Time into a Substitute Revelyst Option Award based on the number of shares subject to such award multiplied by the Revelyst Conversion Ratio and with an exercise price that preserves the fair value of the award following the Transaction. After the Closing, each such Substitute Revelyst Option Award will be subject to substantially the same terms and conditions as the original Vista Outdoor Option to which it relates, and the vesting of the award will be based on continued service with Revelyst.
Deferred Stock Unit Awards. Each Vista Outdoor DSU Award held by a Continuing Non-Employee Director as of immediately prior to the Effective Time will be converted immediately prior to the Effective Time into a Substitute Revelyst DSU Award based on the number of shares subject to such award multiplied by the Revelyst Conversion Ratio. After the Closing, each such Substitute Revelyst DSU Award will be subject to substantially the same terms and conditions as the original Vista Outdoor award to which it relates, and the vesting of the award will be based on continued service with Revelyst.
Outstanding Vista Outdoor equity awards held by any Sporting Products Employee (including, solely for this purpose, each former employee of Vista Outdoor prior to the Closing) or any Non-Continuing Non-Employee Director will be treated as follows as of the Effective Time:
Restricted Stock Unit Awards. At the Effective Time, each Vista Outdoor RSU Award held by a Sporting Products Employee or a Non-Continuing Non-Employee Director will vest and be canceled in exchange for a lump-sum cash payment equal to the Vista Outdoor Pre-Closing Stock Price.
Performance-Based Restricted Stock Unit Awards. At the Effective Time, each Vista Outdoor PSU Award held by a Sporting Products Employee will vest and be canceled in exchange for a lump-sum cash payment equal to the Vista Outdoor Pre-Closing Stock Price, with performance criteria, as applicable, deemed achieved as follows: (i) 100% of target performance, in respect of fiscal years 2022-2024 and 2024-2026 awards and Special Retention PSUs and (ii) 33.33% of target performance, in respect of fiscal year 2023-2025 awards.
Stock Option Awards. At the Effective Time, each Vista Outdoor Option held by a Sporting Products Employee, whether vested or unvested, will be canceled in exchange for a lump-sum cash payment equal to
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the difference between the Vista Outdoor Pre-Closing Stock Price and the exercise price per share of the Vista Outdoor Option.
Deferred Stock Unit Awards. At the Effective Time, each Vista Outdoor DSU Award held by a Non-Continuing Non-Employee Director, whether vested or unvested, will be canceled in exchange for the right to receive a cash payment equal to the Vista Outdoor Pre-Closing Stock Price.
For a more complete discussion of the treatment of Vista Outdoor equity awards, see “Merger Agreement— Adjustments in Respect of Equity Awards; Treatment of Employee Stock Purchase Plan” beginning on page 136.
Beginning on the date of the Merger Agreement, no Offering Period under the Vista Outdoor ESPP will commence, no new participants may join the Vista Outdoor ESPP during the Existing Offering Period and no participant may increase the amount of his or her payroll deductions with respect to the Existing Offering Period. If the Effective Time occurs prior to the end of the Existing Offering Period, all participant contributions under the Vista Outdoor ESPP will be used to purchase shares of Vista Outdoor Common Stock two Business Days prior to the Effective Time in accordance with the terms of the Vista Outdoor ESPP as if it was the last day of the Existing Offering Period.
The Vista Outdoor ESPP will terminate in its entirety on the Closing Date and no further rights will be granted or exercised under the Vista Outdoor ESPP thereafter.
For a more complete discussion of the treatment of the Vista Outdoor ESPP, see “Merger Agreement— Adjustments in Respect of Equity Awards; Treatment of Employee Stock Purchase Plan” beginning on page 136.
Voting by Vista Outdoor Directors and Executive Officers (see “Information About the Vista Outdoor Special Meeting” beginning on page 67).
As of the close of business on [          ], 2024, the last practicable trading day for which information is available as of the date of this proxy statement/prospectus, approximately [          ] shares of Vista Outdoor Common Stock, representing approximately [          ]% of the outstanding shares of Vista Outdoor Common Stock, were held by Vista Outdoor directors and executive officers and their affiliates. Vista Outdoor expects that Vista Outdoor’s directors and executive officers will vote their shares in favor of each of the Proposals, although none of them has entered into any agreements obligating him or her to do so.
Approval of the Merger Proposal requires the affirmative vote of holders of a majority of the outstanding shares of Vista Outdoor Common Stock entitled to vote thereon. Approval of the Advisory Compensation Proposal requires the affirmative vote of holders of a majority of the outstanding shares of Vista Outdoor Common Stock present or represented by proxy at the Special Meeting and voting thereon (excluding abstentions). Approval of the Adjournment Proposal requires the affirmative vote of holders of a majority of the outstanding shares of Vista Outdoor Common Stock present or represented by proxy at the Special Meeting and voting thereon (excluding abstentions). For a more complete discussion of the vote required to approve each of the Proposals, see “Questions and Answers About the Special Meeting—What vote is required to approve the Proposals?” beginning on page 12.
Opinions of Vista Outdoor’s Financial Advisors (see “The Transaction—Opinion of Morgan Stanley & Co. LLC” and “The Transaction—Opinion of Moelis & Company LLC” beginning on pages 98 and 105, respectively).
Opinion of Morgan Stanley & Co. LLC
Morgan Stanley & Co. LLC (“Morgan Stanley”) was retained by Vista Outdoor to act as its financial advisor in connection with the Transaction. On October 15, 2023, Morgan Stanley rendered its oral opinion, which was confirmed by delivery of a written opinion dated October 15, 2023, to the Vista Outdoor Board to the effect that, as of such date, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley as set forth in its written
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opinion, the Consideration (as defined in Morgan Stanley’s written opinion) to be received by Vista Outdoor pursuant to the Merger Agreement and the Separation Agreement was fair from a financial point of view to Vista Outdoor. The full text of Morgan Stanley’s written opinion to the Vista Outdoor Board, dated October 15, 2023, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion, is attached as Annex F to this proxy statement/prospectus and is incorporated herein by reference. The foregoing summary of Morgan Stanley’s opinion is qualified in its entirety by reference to the full text of the opinion. You are encouraged to read Morgan Stanley’s opinion and the summary of Morgan Stanley’s opinion set forth in the section entitled “The Transaction—Opinion of Morgan Stanley & Co. LLC” beginning on page 98 carefully and in their entirety. Morgan Stanley’s opinion was for the benefit of the Vista Outdoor Board, in its capacity as such, and addressed only the fairness from a financial point of view of the Consideration to be received by Vista Outdoor pursuant to the Merger Agreement and the Separation Agreement as of the date of the opinion and did not address any other aspects or implications of the Transaction. Morgan Stanley’s opinion was not intended to, and does not, constitute an opinion or recommendation as to how Vista Outdoor stockholders should vote at the Special Meeting. For more information, see the section entitled “The Transaction—Opinion of Morgan Stanley & Co. LLC” beginning on page 98.
Opinion of Moelis & Company LLC
In connection with the Transaction, the members of the Vista Outdoor Board, excluding former director Mark Gottfredson (the “Vista Outdoor Independent Directors”) (see “The Transaction—Background of the Transaction” beginning on page 74 for a discussion of Mr. Gottfredson’s recusal), and the Vista Outdoor Board received an oral opinion on October 15, 2023, which was subsequently confirmed by delivery of a written opinion dated the same date, from the financial advisor to the Vista Outdoor Independent Directors, Moelis & Company LLC (“Moelis”), as of the date of such opinion, as to the fairness, from a financial point of view, to Vista Outdoor of the Base Purchase Price set forth in the Merger Agreement. The full text of Moelis’ written opinion dated October 15, 2023, which sets forth the assumptions made, procedures followed, matters considered and other limitations on the review undertaken in connection with the opinion, is attached as Annex G to this proxy statement/prospectus and is incorporated herein by reference. Moelis’ opinion was provided for the use and benefit of the Vista Outdoor Independent Directors (solely in their capacity as such) as well as for the use and benefit of the entire Vista Outdoor Board (solely in its capacity as such) in their evaluations of the Transaction. Moelis’ opinion is limited solely to the fairness, from a financial point of view, of the Base Purchase Price and does not address Vista Outdoor’s underlying business decision to effect the Transaction or the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available to Vista Outdoor. Moelis’ opinion does not constitute a recommendation as to how any holder of securities should vote or act with respect to the Transaction or any other matter. For more information, see the section entitled “The Transaction—Opinion of Moelis & Company LLC” beginning on page 105.
Board of Directors and Executive Officers of Revelyst Following the Transaction (see “Revelyst Management” beginning on page 215).
At the Closing, the Revelyst Board is expected to consist of eight members: Michael Callahan, Gerard Gibbons, Bruce Grooms, Gary L. McArthur, Eric Nyman, Michael D. Robinson, Robert M. Tarola and Lynn Utter. Following the Closing, Revelyst is expected to be led by Eric Nyman, as Revelyst’s Chief Executive Officer. Andrew J. Keegan is expected to serve as Revelyst’s Chief Financial Officer, Jung Choi is expected to serve as Revelyst’s General Counsel and Corporate Secretary and Joyce Butler is expected to serve as Revelyst’s Chief Human Resources Officer. For more information regarding Revelyst’s directors and management, see “Revelyst Management” beginning on page 215.
Interests of Vista Outdoor Directors and Executive Officers in the Transaction (see “The Transaction—Interests of Vista Outdoor Directors and Executive Officers in the Transaction” beginning on page 114).
Vista Outdoor’s directors and executive officers have financial interests in the Transaction that may be different from, or in addition to, the interests of Vista Outdoor stockholders generally. The Vista Outdoor Board was aware of and considered these interests in reaching the determination to approve the execution, delivery and performance by
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Vista Outdoor of the Merger Agreement and to recommend that Vista Outdoor stockholders approve the Merger Proposal. These interests include:
the treatment of Vista Outdoor’s equity awards provided for under the Merger Agreement and the Employee Matters Agreement (as described in “Merger Agreement— Adjustments in Respect of Equity Awards; Treatment of Employee Stock Purchase Plan” beginning on page 136);
severance and other benefits payable in the case of certain qualifying terminations of employment under the terms of individual employment agreements or Vista Outdoor’s benefit plans;
the potential to receive an annual bonus for the post-Closing portion of the fiscal year in which the Closing occurs at the greater of threshold or actual performance levels;
the potential to receive cash-based retention awards under a program established for the benefit of certain Sporting Products Employees; and
continued indemnification and insurance coverage under the Merger Agreement, Visa Outdoor’s organizational documents and any indemnification agreements Vista Outdoor has entered into with its directors and executive officers.
These interests are described in more detail, and certain of them are quantified, in the section entitled “The Transaction—Interests of Vista Outdoor Directors and Executive Officers in the Transaction” beginning on page 114.
Risk Factors (see “Risk Factors” beginning on page 37).
The following list of risk factors is not exhaustive. You should carefully read the information in the section entitled “Risk Factors” beginning on page 37 for a more thorough description of these and other risks.
Risks Related to the Transaction
The consummation of the Transaction is subject to a number of conditions, many of which are largely outside of the control of the parties to the Merger Agreement, and, if these conditions are not satisfied or waived on a timely basis, the Merger Agreement may be terminated and the Transaction may not be completed. If any closing conditions are waived, such waiver could have an adverse effect on Vista Outdoor stockholders and/or Revelyst.
Failure to complete the Transaction could adversely affect Vista Outdoor’s stock price and business, results of operations or financial condition.
While the Transaction is pending, Vista Outdoor is subject to business uncertainties and certain contractual restrictions that could adversely affect Vista Outdoor’s business, results of operations or financial condition.
The termination fee and restrictions on solicitation contained in the Merger Agreement may discourage other companies from trying to acquire Vista Outdoor or its businesses.
Litigation against Vista Outdoor, CSG or the members of their respective boards could prevent or delay the completion of the Transaction or result in the payment of damages following completion of the Transaction.
If the Transaction is not consummated by the applicable deadline, either Vista Outdoor or Merger Sub Parent may terminate the Merger Agreement, subject to certain exceptions.
Vista Outdoor’s directors and executive officers have interests in the Transaction that may be different from your interests as a stockholder of Vista Outdoor.
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Revelyst may be unable to achieve some or all of the benefits that Revelyst expects to achieve from the Transaction, which could materially adversely affect Revelyst’s business, financial condition and results of operations.
Revelyst may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as an independent, publicly traded company, and Revelyst may experience increased costs after the Closing.
Revelyst has no operating history as an independent, publicly traded company, and Revelyst’s historical and pro forma financial data is not necessarily representative of the results Revelyst would have achieved if Revelyst had been an independent, publicly traded company and may not be a reliable indicator of Revelyst’s future results.
Revelyst expects that the terms of the new revolving credit facility that Revelyst intends to enter into concurrently with or prior to the Closing will restrict Revelyst’s current and future operations, particularly Revelyst’s ability to incur debt that it may need to fund initiatives in response to changes in Revelyst’s business, the industries in which Revelyst operates, the economy and governmental regulations.
Following the Closing, Revelyst may be unable to, or the Revelyst Board may otherwise decide not to, return the cash on hand that is in excess of $250 million to Revelyst stockholders in the form of a share buyback or a special dividend.
The transfer to Revelyst by Vista Outdoor of certain contracts, permits and other assets and rights may require the consents or approvals of, or provide other rights to, third parties and governmental authorities. If such consents or approvals are not obtained, Revelyst may not be entitled to the benefit of such contracts, permits and other assets and rights, which could increase Revelyst’s expenses or otherwise harm Revelyst’s business and financial performance.
Potential indemnification obligations of Revelyst in connection with the Transaction could adversely affect Revelyst’s business, results of operations or financial condition.
Risks Related to the Revelyst Business
Revelyst may not be able to successfully implement the acquisition component of Revelyst’s strategic leverage strategy, particularly if Revelyst is unable to raise the capital necessary to finance acquisitions.
General economic conditions may adversely affect Revelyst’s business, results of operations and financial condition, including by creating the potential for future impairments of goodwill and other intangible and long-lived assets.
Significant supplier capacity constraints, supplier production disruptions, supplier quality issues or price increases could increase Revelyst’s operating costs and adversely impact the competitive positions of Revelyst’s products.
Shortages of, and price increases for, labor, components, parts and other supplies, as well as commodities used in the manufacturing and distribution of Revelyst’s products, may delay or reduce Revelyst’s sales and increase Revelyst’s costs, thereby harming Revelyst’s results of operations.
Revelyst’s business could be adversely impacted by inflation and high interest rates.
Seasonality and weather conditions may cause Revelyst’s results of operations to vary from quarter to quarter.
Climate change may adversely impact Revelyst’s business.
Revelyst’s revenues and results of operations may fluctuate unexpectedly from quarter-to-quarter, which may cause Revelyst’s stock price to decline.
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Goodwill and intangible assets represent a significant portion of Revelyst’s total assets, and any impairment of these assets could negatively impact Revelyst’s results of operations and parent company equity.
Revelyst’s results of operations could be materially harmed if Revelyst is unable to accurately forecast demand for its products.
A disruption or a significant increase in the cost of Revelyst’s primary delivery and shipping services for Revelyst’s products and component parts or a significant disruption at shipping ports could have a negative impact on Revelyst’s business.
Revelyst faces risks relating to Revelyst’s international business operations that could adversely affect Revelyst’s business, financial condition or results of operations.
Some of Revelyst’s products contain licensed, third-party technology that provides important product functionality and features. The loss of or inability to obtain and maintain any such licenses could have a material adverse effect on Revelyst’s business.
Failure to attract and retain key personnel could have an adverse effect on Revelyst’s results of operations.
Catastrophic events may disrupt Revelyst’s business.
Revelyst’s sales are highly dependent on purchases by several large customers, and Revelyst may be adversely affected by the loss of, or any significant decline in sales to, one or more of these customers.
Insolvency, credit problems or other financial difficulties that could confront Revelyst’s retailers or distributors could expose Revelyst to financial risk.
Competition in Revelyst’s industry may hinder Revelyst’s ability to execute Revelyst’s business strategy, maintain profitability or maintain relationships with existing customers.
Revelyst’s success depends upon its ability to introduce new compelling products into the marketplace and respond to customer preferences.
An inability to expand Revelyst’s e-commerce business could reduce its future growth.
Revelyst’s business is highly dependent upon its brand recognition and reputation, and the failure to maintain or enhance its brand recognition or reputation would likely have an adverse effect on Revelyst’s business.
Use of social media to disseminate negative commentary and boycotts may adversely impact Revelyst’s business.
Revelyst manufactures, sources and sells products that create exposure to potential product liability, warranty liability or personal injury claims and litigation.
Revelyst may incur substantial litigation costs to protect its intellectual property, and if Revelyst is unable to protect its intellectual property, Revelyst may lose its competitive advantage. Revelyst may be subject to intellectual property infringement claims, which could cause Revelyst to incur litigation costs and divert management attention from Revelyst’s business.
Revelyst is subject to extensive regulation that imposes significant compliance costs on Revelyst and that could result in fines, penalties, business disruptions or other costs and liabilities.
Increased focus and expectations on climate change and other Environmental, Social and Governance (“ESG”) matters may impose additional costs on Revelyst or could have a material adverse effect on Revelyst’s business, financial condition and results of operations and damage Revelyst’s reputation.
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Failure to comply with the U.S. Foreign Corrupt Practices Act or other applicable anti-corruption legislation, as well as export controls and trade sanctions, could result in fines or criminal penalties.
If Revelyst’s efforts to protect the security of personal information about Revelyst’s customers and consumers are unsuccessful and unauthorized access to that personal information is obtained, or Revelyst experiences a significant disruption in Revelyst’s computer systems or a cybersecurity breach, such as the ransomware attack experienced by Fox Racing in April 2021 prior to being acquired by Revelyst, Revelyst could experience an adverse effect on its operations, Revelyst could be subject to costly government enforcement action and private litigation and Revelyst’s reputation could suffer.
Failure to comply with data privacy and security laws and regulations could adversely affect Revelyst’s operating results and business.
Changes in U.S. and global trade policies, including new and potential tariffs on goods Revelyst imports or on products Revelyst exports to other countries, could increase Revelyst’s cost of goods or limit Revelyst’s access to export markets.
Revelyst’s results of operations could be impacted by unanticipated changes in tax provisions or exposure to additional income tax liabilities.
Fluctuations in foreign currency exchange rates may adversely affect Revelyst’s financial results.
Revelyst may need to raise capital to fund Revelyst’s ongoing working capital, capital expenditures and other financing requirements, and Revelyst cannot be sure that financing will be available on attractive terms or at all.
Variable rate indebtedness would subject Revelyst to interest rate risk, which could cause Revelyst’s debt service obligations to increase significantly.
If Revelyst’s estimates or judgments relating to its critical accounting policies prove to be incorrect or change significantly, Revelyst’s results of operations could be harmed.
Risks Relating to Revelyst Common Stock
No market for Revelyst Common Stock currently exists, and an active trading market may not develop or be sustained after the Transaction. Following the Transaction, Revelyst’s stock price may fluctuate significantly.
Substantial sales of Revelyst Common Stock may occur following the Closing, which could cause Revelyst’s stock price to decline.
Revelyst does not anticipate paying any regular dividends on its common stock for the foreseeable future, and as a result, your only opportunity to achieve a return on your investment is if the price of Revelyst Common Stock appreciates.
Provisions of the Revelyst Charter, the Revelyst Bylaws and Delaware law may prevent or delay an acquisition of Revelyst, which could decrease the trading price of Revelyst Common Stock.
The Revelyst Charter will designate the Delaware Court of Chancery as the exclusive forum for certain types of actions and proceedings that may be initiated by Revelyst stockholders, and the federal district courts of the United States as the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act, which could limit Revelyst stockholders’ ability to choose the judicial forum for disputes with Revelyst or Revelyst’s directors, officers or employees.
Your percentage of ownership in Revelyst may be diluted in the future.
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Regulatory Approvals (see “The Transaction—Regulatory Approvals Related to the Transaction” beginning on page 121).
U.S. Antitrust
Under the HSR Act and related rules, the Transaction may not be completed until notifications have been given and information furnished to the U.S. Federal Trade Commission and to the Antitrust Division of the Department of Justice, and all statutory waiting period requirements have expired. Each of Vista Outdoor and CSG filed its Notification and Report form with respect to the Transaction on November 9, 2023. On December 11, 2023, the waiting period under the HSR Act expired.
United Kingdom FDI
Under the United Kingdom National Security and Investment Act 2021, transactions involving entities that carry on specified activities that fall within certain mandatory sectors in the United Kingdom must be notified and approved by the UK Investment Security Unit (“ISU”) before closing. On November 10, 2023, CSG submitted a notification to the ISU under the United Kingdom National Security and Investment Act 2021 to obtain clearance. On November 20, 2023, the ISU accepted the notification, beginning the period of initial investigation. The ISU has 30 working days following such acceptance to approve the Transaction or call-in the Transaction for further investigation. On January 5, 2024, the ISU approved the Transaction.
CFIUS
The Transaction is being reviewed by CFIUS. Vista Outdoor and CSG filed a joint voluntary notice with CFIUS with respect to the Transaction, which was accepted on December 28, 2023. On February 12, 2024, CFIUS notified Vista Outdoor and CSG that CFIUS is undertaking a 45-calendar-day investigation of the Transaction (which, in extraordinary circumstances, CFIUS may extend to 60 calendar days). If, at the end of the investigation period, CFIUS determines that there are no unresolved national security concerns, it will clear the Transaction. If CFIUS determines that there are unresolved national security concerns, it may recommend that the President of the United States suspend or prohibit the Transaction.
For a more complete discussion of the regulatory approvals required in connection with the Transaction, see “The Transaction—Regulatory Approvals Related to the Transaction” beginning on page 121.
Termination (see “Merger Agreement—Termination, Amendment, Extension and Waiver” beginning on page 157).
The Merger Agreement may be terminated at any time prior to the Effective Time in the following ways:
By mutual written consent of Vista Outdoor and Merger Sub Parent.
By either Vista Outdoor or Merger Sub Parent:
if the Closing has not occurred on or before the End Date (provided that this termination right will not be available to a party if the failure of the Closing to occur on or before the End Date is primarily due to the breach by such party of any Transaction Document (including, in the case of Vista Outdoor, Revelyst, and in the case of Merger Sub Parent, CSG or Merger Sub));
if the Vista Outdoor Stockholder Approval has not been obtained by reason of the failure to obtain the required vote upon a vote taken at the meeting of the Vista Outdoor stockholders held for the purpose of obtaining such approval; or
if any final and non-appealable Restraint is in effect which prohibits, enjoins or makes illegal the consummation of the Transaction (provided that the party seeking to exercise this termination right (and such party’s affiliates) must have performed in all material respects its obligations under the Merger Agreement with respect to regulatory filings and required efforts to prevent the entry of and to remove such Restraint).
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By Vista Outdoor:
if CSG, Merger Sub Parent or Merger Sub breaches or fails to perform in any respect any of their respective representations, warranties or covenants set forth in any Transaction Document such that the Closing conditions in the Merger Agreement pertaining to (i) the accuracy of the representations and warranties made by them or (ii) their performance in all material respects of their obligations under the Transaction Documents would not be satisfied, and such breach or failure to perform is not reasonably capable of being cured by the End Date or, if reasonably capable of being cured, has not been cured within 30 days after Merger Sub Parent has received written notice of Vista Outdoor’s intention to terminate pursuant to this termination right, provided that Vista Outdoor shall not have the right to terminate the Merger Agreement pursuant to the foregoing if Vista Outdoor or Revelyst is then in breach of any representation, warranty or covenant set forth in any Transaction Document and such breach would give rise to the failure of any conditions to obligations of Vista Outdoor and Revelyst to effect the Transaction set forth in the Merger Agreement; or
in order to enter into a Vista Outdoor Acquisition Agreement (as defined in “Merger Agreement—Vista Outdoor Board Recommendation; Superior Proposals; Vista Outdoor Adverse Recommendation Change; Matching Right” beginning on page 148) (provided that, prior to or concurrently with (and as a condition to) such termination, Vista Outdoor must pay or cause to be paid the termination fee specified in the Merger Agreement to the extent due and payable under the Merger Agreement (as described in the section entitled “Merger Agreement—Termination, Amendment, Extension and Waiver—Termination Fees” beginning on page 158)).
By Merger Sub Parent:
if Vista Outdoor or Revelyst breaches or fails to perform in any respect any of their respective representations, warranties or covenants set forth in any Transaction Document such that the Closing conditions in the Merger Agreement pertaining to (i) the accuracy of the representations and warranties made by them or (ii) their performance in all material respects of their obligations under the Transaction Documents would not be satisfied, and such breach or failure to perform is not reasonably capable of being cured by the End Date or, if reasonably capable of being cured, has not been cured within 30 days after Vista Outdoor has received written notice of Merger Sub Parent’s intention to terminate pursuant to this termination right, provided that Merger Sub Parent shall not have the right to terminate the Merger Agreement pursuant to the foregoing if CSG, Merger Sub Parent or Merger Sub is then in breach of any representation, warranty or covenant set forth in any Transaction Document and such breach would give rise to the failure of any conditions to obligations of Merger Sub Parent or Merger Sub to effect the Transaction set forth in the Merger Agreement; or
if the Vista Outdoor Board or any committee thereof makes a Vista Outdoor Adverse Recommendation Change (as defined in “Merger Agreement—Vista Outdoor Board Recommendation; Superior Proposals; Vista Outdoor Adverse Recommendation Change; Matching Right” beginning on page 148).
For a more complete discussion of the termination rights under the Merger Agreement, see “Merger Agreement—Termination, Amendment, Extension and Waiver” beginning on page 157.
Under the Merger Agreement, Merger Sub Parent is required to pay to Vista Outdoor a termination fee of $114,600,000 if either Merger Sub Parent or Vista Outdoor terminates the Merger Agreement because:
the Closing did not take place before the End Date; or
a final and non-appealable Restraint is in effect which prohibits, enjoins or makes illegal the consummation of the Transaction; and
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in each case, at the time of such termination, all the conditions to the Closing (other than conditions that are solely conditions to the obligations of Vista Outdoor and Revelyst to effect the Merger and the obligation of Vista Outdoor to effect the Subscription) have been satisfied or waived (other than those conditions (i) pertaining to receipt of governmental approvals, (ii) pertaining to the absence of Restraints (to the extent such Restraints arise under the HSR Act, any other antitrust, competition or pre-merger notification or trade regulation or foreign direct investment laws (other than Section 721 of Title VII of the Defense Production Act of 1950 (the “DPA”)) or order of any jurisdiction (collectively, “Review Laws”), or the DPA), (iii) that require certain pre-Closing steps relating to the Separation to have been completed (provided such condition would have been reasonably capable of being satisfied on the date the Merger Agreement is terminated if the Closing occurred on such date) or (iv) that by their nature are to be satisfied at the Closing (provided that such conditions would have been satisfied on the date the Merger Agreement is terminated if the Closing occurred on such date)).
Under the Merger Agreement, Vista Outdoor is required to pay Merger Sub Parent a termination fee of $47,750,000 in the event that:
Merger Sub Parent terminates the Merger Agreement due to a Vista Outdoor Adverse Recommendation Change having been made;
Vista Outdoor terminates the Merger Agreement in order to enter into a Vista Outdoor Acquisition Agreement in respect of a Vista Outdoor Superior Proposal (as defined in “Merger Agreement—Covenants of Vista Outdoor Regarding Non-Solicitation” beginning on page 146) or
(a) either Vista Outdoor or Merger Sub Parent terminates the Merger Agreement due to (i) the Effective Time not occurring by the End Date (but only if the Vista Outdoor stockholders’ meeting for the purpose of obtaining the Vista Outdoor Stockholder Approval has not been held by the End Date) or (ii) the Vista Outdoor Stockholder Approval not being obtained due to the failure to obtain the required vote at the meeting of the Vista Outdoor stockholders held for the purpose of obtaining such approval and (b) a Vista Outdoor Acquisition Proposal (as defined in “Merger Agreement—Covenants of Vista Outdoor Regarding Non-Solicitation” beginning on page 146) is publicly made or otherwise becomes publicly known (in each case after the date of the Merger Agreement but prior to its termination) and within 12 months of such termination Vista Outdoor either (i) enters into a definitive agreement with respect to a Vista Outdoor Acquisition Proposal and such proposal is subsequently consummated or (ii) consummates a Vista Outdoor Acquisition Proposal (provided that, for the purposes of the foregoing, references to “15%” in the definition of Vista Outdoor Acquisition Proposal are deemed to be references to “50%”).
For a more complete discussion of the termination fees payable under the Merger Agreement, see “Merger Agreement—Termination, Amendment, Extension and Waiver—Termination Fees” beginning on page 158.
Comparison of Stockholders’ Rights (see “Comparison of the Rights of Vista Outdoor Stockholders and Revelyst Stockholders” beginning on page 263).
Upon the closing of the Transaction, Vista Outdoor stockholders receiving the Merger Consideration will become stockholders of Revelyst and their rights will continue to be governed by Delaware law, including the DGCL, and will be governed by the governing corporate documents of Revelyst in effect at the Effective Time. Vista Outdoor stockholders will have different rights once they become Revelyst stockholders due to differences between the certificates of incorporation and bylaws of Vista Outdoor and Revelyst. These differences are described in detail under “Comparison of the Rights of Vista Outdoor Stockholders and Revelyst Stockholders” beginning on page 263.
U.S. Federal Income Tax Consequences (see “Material U.S. Federal Income Tax Consequences” beginning on page 127).
The receipt of Revelyst Common Stock and cash in respect of Vista Outdoor Common Stock pursuant to the Transaction will be a taxable transaction for U.S. federal income tax purposes for Vista Outdoor stockholders. Therefore, generally, a U.S. Holder (as defined in the section entitled “Material U.S. Federal Income Tax Consequences” beginning on page 127) will recognize capital gain or loss equal to the difference between (i) such U.S. Holder’
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s adjusted tax basis in its Vista Outdoor Common Stock and (ii) the fair market value of the Revelyst Common Stock and cash received in exchange for Vista Outdoor Common Stock pursuant to the Transaction. A U.S. Holder’s adjusted tax basis in its Vista Outdoor Common Stock will generally equal such U.S. Holder’s purchase price for such Vista Outdoor Common Stock.
Except in certain circumstances, a Non-U.S. Holder (as defined in the section entitled “Material U.S. Federal Income Tax Consequences” beginning on page 127) will not be subject to U.S. federal income or withholding tax on the exchange of Vista Outdoor Common Stock for Revelyst Common Stock and cash in the Transaction.
The tax consequences to Vista Outdoor stockholders of the Transaction may depend on a holder’s particular circumstances. Vista Outdoor stockholders should read the discussion in the section entitled “Material U.S. Federal Income Tax Consequences” beginning on page 127 for a more detailed description of the U.S. federal income tax consequences of the Transaction and should consult their own tax advisors for a full understanding of the tax consequences to them of the Transaction.
Appraisal Rights (see “The Transaction—Appraisal Rights” beginning on page 123).
If the Merger is consummated, persons who do not wish to accept the Merger Consideration are entitled to seek appraisal of their shares of Vista Outdoor Common Stock under Section 262 and, if all procedures described in Section 262 are strictly complied with, to receive payment in cash for the fair value of their shares of Vista Outdoor Common Stock exclusive of any element of value arising from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery, together with interest, if any, to be paid upon the amount determined to be the fair value. The “fair value” of your shares of Vista Outdoor Common Stock as determined by the Delaware Court of Chancery may be more or less than, or the same as, the Merger Consideration that you are otherwise entitled to receive under the Merger Agreement. These rights are known as “appraisal rights”. This proxy statement/prospectus serves as a notice of such appraisal rights pursuant to Section 262.
Persons who exercise appraisal rights under Section 262 will not receive the Merger Consideration they would otherwise be entitled to receive pursuant to the Merger Agreement. They will receive an amount determined to be the “fair value” of their shares of Vista Outdoor Common Stock following petition to, and an appraisal by, the Delaware Court of Chancery. Persons considering seeking appraisal should recognize that the fair value of their shares of Vista Outdoor Common Stock determined under Section 262 could be more than, the same as or less than the Merger Consideration they would otherwise be entitled to receive pursuant to the Merger Agreement. Strict compliance with the procedures set forth in Section 262 is required. Failure to comply strictly with all of the procedures set forth in Section 262 may result in the withdrawal, loss or waiver of appraisal rights. Consequently, and in view of the complexity of the provisions of Section 262, persons wishing to exercise appraisal rights are urged to consult their legal and financial advisors before attempting to exercise such rights.
A holder of record or a beneficial owner of shares of Vista Outdoor Common Stock who, in each case, (i) continuously holds such shares through the Effective Time, (ii) has not consented to or otherwise voted in favor of the Merger Proposal or otherwise withdrawn, lost or waived appraisal rights, (iii) strictly complies with the procedures under Section 262, (iv) does not thereafter withdraw his, her or its demand for appraisal of such shares and (v) in the case of a beneficial owner, a person who (A) reasonably identifies in his, her or its demand the holder of record of the shares for which the demand is made, (B) provides documentary evidence of such beneficial owner’s beneficial ownership and a statement that such documentary evidence is a true and correct copy of what it purports to be and (C) provides an address at which such beneficial owner consents to receive notices given by Vista Outdoor and to be set forth on the Chancery List (as defined in the section entitled “The Transaction—Appraisal Rights” beginning on page 123), will be entitled to receive the fair value of his, her or its shares of Vista Outdoor Common Stock exclusive of any element of value arising from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery, together with interest, if any, to be paid upon the amount determined to be the fair value.
A copy of Section 262 may be accessed without subscription or cost at the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262. The foregoing summary is not a complete statement of the law relating to appraisal rights and is qualified in its entirety by reference to Section 262 and any amendments
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thereto after the date of this proxy statement/prospectus. Any person who desires to exercise his, her or its appraisal rights should review carefully Section 262 and is urged to consult his, her or its legal and financial advisors before electing or attempting to exercise such rights. For more information, see “The Transaction—Appraisal Rights” beginning on page 123.
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SUMMARY OF HISTORICAL AND UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA OF REVELYST
The following tables set forth summary combined financial data as of December 24, 2023, March 31, 2023 and March 31, 2022 and for the nine months ended December 24, 2023 and December 25, 2022 and the years ended March 31, 2023, March 31, 2022 and March 31, 2021 that have been derived from the Revelyst combined financial statements and the Revelyst unaudited pro forma condensed combined financial statements, which are included elsewhere in this proxy statement/prospectus. For each of the periods presented, Revelyst was a wholly owned subsidiary of Vista Outdoor. The Revelyst summary historical combined financial data does not necessarily reflect what Revelyst’s results of operations and financial position would have been if Revelyst had operated as an independent, publicly traded company during the periods presented. In addition, the Revelyst summary historical combined financial data does not reflect changes that Revelyst expects to experience in the future as a result of its separation from Vista Outdoor, including changes in the financing, operations, cost structure and personnel needs of Revelyst’s business. Further, the Revelyst summary historical combined financial data includes allocations of certain Vista Outdoor corporate expenses. Revelyst believes the assumptions and methodologies underlying the allocation of these expenses are reasonable. However, such expenses may not be indicative of the actual level of expense that Revelyst would have incurred if Revelyst had operated as an independent, publicly traded company or of the costs expected to be incurred in the future. Accordingly, the historical results should not be relied upon as an indicator of Revelyst’s future performance.
The Revelyst summary unaudited pro forma condensed combined income statement data has been prepared to give effect to the Pro Forma Transactions (as defined in the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements of Revelyst” beginning on page 204) as if the Pro Forma Transactions had occurred or became effective as of April 1, 2022, the beginning of Revelyst’s most recently completed fiscal year. The Revelyst summary unaudited pro forma combined condensed balance sheet data has been prepared to give effect to the Pro Forma Transactions as though the Pro Forma Transactions had occurred as of December 24, 2023, Revelyst’s latest balance sheet date. The Revelyst summary pro forma financial data does not purport to represent what Revelyst’s financial position and results of operations would have been had the Closing occurred on the dates indicated and is not necessarily indicative of Revelyst’s future financial position and future results of operations. In addition, the Revelyst summary pro forma financial data is provided for illustrative and informational purposes only. The pro forma adjustments are based on available information and assumptions Revelyst believes are reasonable; however, such adjustments are subject to change.
The Revelyst summary historical and pro forma financial data presented below should be read in conjunction with the Revelyst combined financial statements and the accompanying notes thereto, the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Revelyst” beginning on page 186 and the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements of Revelyst” beginning on page 204.
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Nine months endedYears ended March 31,
Pro FormaHistoricalPro FormaHistorical
(Amounts in thousands)December 24, 2023December 24, 2023December 25, 20222023202320222021
Results of Operations:
Sales, net (a)
$961,352 $975,627 $1,007,341 $1,468,092 $1,339,378 $1,322,497 $1,119,615 
Cost of sales688,127 702,402 713,744 1,037,070 962,587 925,041 798,192 
Gross profit273,225 273,225 293,597 431,022 376,791 397,456 321,423 
Operating expenses:
Research and development31,132 31,132 25,744 37,761 36,652 21,304 16,531 
Selling, general, and administrative273,581 273,581 239,037 383,429 333,923 273,731 205,450 
Impairment of goodwill and intangibles 218,812 218,812 — 374,355 374,355 — — 
Operating income (loss)(250,300)(250,300)28,816 (364,523)(368,139)102,421 99,442 
Other income (expense)(1,629)(1,629)1,380 1,424 2,124 — — 
Interest income (expense)
(917)96 100 (1,177)173 
Income (loss) before income taxes(252,846)(251,833)30,296 (364,276)(365,842)102,422 99,447 
Income tax (provision) benefit21,041 21,041 (3,313)29,026 29,181 (24,045)6,943 
Net income (loss)$(231,805)$(230,792)$26,983 $(335,250)$(336,661)$78,377 $106,390 
Other Data:
Adjusted EBITDA (b)
$40,121 $81,432 $75,132 $154,580 $137,650 
Adjusted EBITDA margin4.1 %8.1 %5.6 %11.7 %12.3 %
Sales by Segment:
Precision Sports Technology$180,248 $180,248 $189,010 $235,825 $235,825 $186,065 $98,543 
Adventure Sports452,314 452,314 470,585 731,422 625,567 556,745 477,575 
Outdoor Performance328,790 343,065 347,746 500,845 477,986 579,687 543,497 
Cash Flow Data:
Cash provided by (used for) operating activities$159,325 $59,372 $63,810 $(30,925)$167,285 
Cash used for investing activities(9,323)(771,043)(774,418)(558,535)(10,284)
Cash (used for) provided by financing activities(146,794)748,747 719,190 595,045 (157,638)
Capital expenditures(9,451)(9,589)(12,872)(13,099)(10,363)
__________________
(a)Historical amounts include related party sales of $14,275 and $12,896 for the nine months ended December 24, 2023 and December 25, 2022, respectively, and $17,502, $15,767 and $13,847 for the fiscal years ended March 31, 2023, 2022 and 2021, respectively.
(b)Adjusted EBITDA does not reflect the estimated dis-synergies arising from Revelyst operating as a standalone public company following the Closing.
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As of
Pro FormaHistorical
December 24,
2023
December 24,
2023
March 31,
2023
March 31,
2022
Balance Sheet Data:
Cash and cash equivalents$415,192 $18,942 $15,541 $7,280 
Net current assets735,463 337,881 460,029 378,909 
Net property, plant, and equipment65,303 65,303 71,344 53,015 
Total assets1,978,653 1,577,372 1,950,526 1,554,161 
Non-GAAP Operating Performance Measures
Adjusted EBITDA is defined as net income before other income (expense), interest, taxes and depreciation and amortization, adjusted for transaction and transition costs, inventory step-up expense, contingent consideration, post-acquisition compensation, executive transition costs, planned separation costs, goodwill and intangibles impairment and restructuring. Revelyst calculated “Adjusted EBITDA margin” as Adjusted EBITDA divided by sales, net. Adjusted EBITDA and Adjusted EBITDA margin are not measures of financial performance under accounting principles generally accepted in the United States (“GAAP”). Accordingly, these measures should not be considered as a substitute for net income or other income data prepared in accordance with GAAP. Revelyst management uses Adjusted EBITDA and Adjusted EBITDA margin to evaluate the operating performance of Revelyst’s business, to aid in period-to-period comparability, for planning and forecasting purposes and to measure results against forecasts. Revelyst management believes that Adjusted EBITDA and Adjusted EBITDA margin may provide useful information to investors regarding Revelyst’s results of operations for the foregoing reasons and because securities analysts, investors and other interested parties frequently use Adjusted EBITDA and Adjusted EBITDA margin as performance measures. Because Adjusted EBITDA and Adjusted EBITDA margin excludes some, but not all, items that affect net income and may vary among companies, Revelyst’s Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to similarly titled measures of other companies. The following sets forth a net income to Adjusted EBITDA and Adjusted EBITDA margin reconciliation for the periods presented:
(amounts in thousands)Nine months ended December 24, 2023
Adjusted EBITDA by segment:
Precision Sports Technology
Adventure SportsOutdoor PerformanceCorporate and other reconciling itemsTotal
Net Income (loss) (a)
$30,884 $(6,391)$(7,968)$(247,317)$(230,792)
Other expense, net— — — 1,629 1,629 
Interest income, net— — — (96)(96)
Income tax benefit— — — (21,041)(21,041)
Depreciation and amortization7,721 27,589 17,315 442 53,067 
Transition costs (1)
— — — 6,766 6,766 
Post-acquisition compensation (4)
— — — 480 480 
Executive transition costs (5)
— — — 1,531 1,531 
Planned separation costs (6)
— — — 771 771 
Restructuring (8)
— — — 5,848 5,848 
Contingent consideration (3)
— — — 3,146 3,146 
Impairment of goodwill and intangibles (7)
— — — 218,812 218,812 
Adjusted EBITDA$38,605 $21,198 $9,347 $(29,029)$40,121 
Sales, net$180,248 $452,314 $343,065 $975,627 
Adjusted EBITDA margin21.4 %4.7 %2.7 %4.1 %
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(amounts in thousands)Nine months ended December 25, 2022
Adjusted EBITDA by segment:
Precision Sports Technology
Adventure SportsOutdoor PerformanceCorporate and other reconciling itemsTotal
Net Income (loss) (a)
$51,353 $17,764 $1,774 $(43,908)$26,983 
Other income, net
— — — (1,380)(1,380)
Interest income, net
— — — (100)(100)
Income tax provision— — — 3,313 3,313 
Depreciation and amortization7,613 20,996 16,339 907 45,855 
Transaction and transition costs (1)
— — — 8,953 8,953 
Contingent consideration (3)
— — — (16,311)(16,311)
Post-acquisition compensation (4)
— — — 4,747 4,747 
Planned separation costs (6)
— — — 1,294 1,294 
Inventory step-up expense (2)
— — — 8,078 8,078 
Adjusted EBITDA$58,966 $38,760 $18,113 $(34,407)$81,432 
.
Sales, net$189,010 $470,585 $347,746 $1,007,341 
Adjusted EBITDA margin31.2 %8.2 %5.2 %8.1 %
(amounts in thousands)
Year Ended March 31, 2023 (b)
Adjusted EBITDA by segment:
Precision Sports Technology
Adventure SportsOutdoor PerformanceCorporate and other reconciling itemsTotal
Net Income (loss) (a)
$55,348 $7,305 $(1,575)$(397,739)$(336,661)
Other income, net— — — (2,124)(2,124)
Interest income, net— — — (173)(173)
Income tax benefit— — — (29,181)(29,181)
Depreciation and amortization10,159 30,370 22,299 55 62,883 
Transaction and transition costs (1)
— — — 12,387 12,387 
Inventory step-up expense (2)
— — — 9,528 9,528 
Contingent consideration (3)
— — — (27,120)(27,120)
Post-acquisition compensation (4)
— — — (1,018)(1,018)
Executive transition costs (5)
— — — 2,540 2,540 
Planned separation costs (6)
— — — 643 643 
Impairment of goodwill and intangibles (7)
— — — 374,355 374,355 
Restructuring (8)
— — — 9,073 9,073 
Adjusted EBITDA$65,507 $37,675 $20,724 $(48,774)$75,132 
Sales, net$235,825 $625,567 $477,986 $1,339,378 
Adjusted EBITDA margin27.8 %6.0 %4.3 %5.6 %
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(amounts in thousands)
Year Ended March 31, 2022 (b)
Adjusted EBITDA by segment:
Precision Sports Technology
Adventure SportsOutdoor PerformanceCorporate and other reconciling itemsTotal
Net Income (loss) (a)
$51,436 $54,528 $58,530 $(86,117)$78,377 
Interest income, net— — — (1)(1)
Income tax provision— — — 24,045 24,045 
Depreciation and amortization5,239 17,847 16,805 2,046 41,937 
Transaction and transition costs (1)
— — — 5,364 5,364 
Inventory step-up expense (2)
— — — 1,991 1,991 
Contingent consideration (3)
— — — 734 734 
Post-acquisition compensation (4)
— — — 2,133 2,133 
Adjusted EBITDA$56,675 $72,375 $75,335 $(49,805)$154,580 
Sales, net$186,065 $556,745 $579,687 $— $1,322,497 
Adjusted EBITDA margin30.5 %13.0 %13.0 %11.7 %
(amounts in thousands)
Year Ended March 31, 2021 (b)
Adjusted EBITDA by segment:
Precision Sports Technology
Adventure SportsOutdoor PerformanceCorporate and other reconciling itemsTotal
Net Income (loss) (a)
$15,982 $46,858 $75,102 $(31,552)$106,390 
Interest income, net— — — (5)(5)
Income tax benefit— — — (6,943)(6,943)
Depreciation and amortization904 18,837 15,848 2,214 37,803 
Transaction and transition costs (1)
— — — 405 405 
Adjusted EBITDA$16,886 $65,695 $90,950 $(35,881)$137,650 
Sales, net$98,543 $477,575 $543,497 $— $1,119,615 
Adjusted EBITDA margin17.1 %13.8 %16.7 %12.3 %
__________________
(a)Revelyst does not calculate GAAP net income (loss) at the segment level. Segment net income does not include interest, income taxes or other income (expense), as all these expenses are recorded at corporate. Revelyst has reconciled consolidated net income (loss) to Adjusted EBITDA.
(b)During the third quarter of fiscal year 2024, Revelyst made changes in Revelyst’s operating and reportable segments. Accordingly fiscal year 2023, 2022 and 2021 have been restated to conform to the change.
(1)Transaction costs, including accounting, legal and advisor fees, and transition costs, in each case incurred in connection with possible and completed transactions.
(2)Cost of goods sold related to the fair value step-up in inventory allocated from the Foresight Sports, Stone Glacier, Fox Racing and Simms Fishing acquisitions.
(3)Non-cash expense or income related to the change in the estimated fair value of the contingent consideration payable related to Revelyst’s QuietKat, Fiber Energy, Stone Glacier and Fox Racing acquisitions.
(4)Post-acquisition compensation expense related to the Venor and Stone Glacier acquisitions.
(5)Executive transition costs for severance, executive search fees and related costs for the transition of Revelyst’s CEO and General Counsel, who departed Vista Outdoor during the fourth quarter of fiscal year 2023.
(6)Costs associated with the Transaction, including restructuring, severance and advisory and legal fees.
(7)Impairment of goodwill and intangibles. See Notes 2, Significant Accounting Policies, and 11, Goodwill and Intangible Assets, to the Revelyst audited combined financial statements included elsewhere in this proxy statement/prospectus for further information and Notes 1, The Company and Basis of Presentation, and 10, Goodwill and Intangible Assets, to the Revelyst unaudited condensed combined financial statements included elsewhere in this proxy statement/prospectus for further information.
(8)Restructuring costs related to an over $50 million cost reduction and earnings improvement program, which includes severance and asset impairments related to product line reassessments, office closures and headcount reductions across Revelyst’s brands and corporate teams.
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HISTORICAL MARKET PRICE AND DIVIDEND INFORMATION
Vista Outdoor Common Stock is listed on the NYSE under the symbol “VSTO.” On October 13, 2023, the last trading day before the announcement of the signing of the Merger Agreement, the closing price of Vista Outdoor Common Stock was $32.80 per share. On [          ], 2024, the last practicable trading day for which information is available as of the date of this proxy statement/prospectus, the closing price of Vista Outdoor Common Stock was $[          ] per share. For information on the current price per share of Vista Outdoor Common Stock, you are urged to consult publicly available sources.
Market price data for Revelyst Common Stock is not available because Revelyst is currently a wholly owned subsidiary of Vista Outdoor and shares of Revelyst Common Stock do not trade separately from shares of Vista Outdoor Common Stock.
Vista Outdoor Dividend Policy
Vista Outdoor has historically not paid any dividends on shares of Vista Outdoor Common Stock. The Vista Outdoor Board will make all decisions regarding the payment of future dividends, and such decisions will depend on many factors, including Vista Outdoor’s financial condition, earnings, capital requirements of its operating subsidiaries, covenants associated with certain of its debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by the Vista Outdoor Board. The terms of the Merger Agreement generally restrict Vista Outdoor’s ability to declare and pay dividends to Vista Outdoor stockholders during the interim period commencing from the date of the Merger Agreement until the Closing. Vista Outdoor cannot assure you that it will pay a dividend in the future or continue to pay any dividend if it does commence paying dividends.
Revelyst Dividend Policy
Revelyst intends to retain future earnings for use in the operation of its business and to fund future growth, including through acquisitions. Revelyst does not anticipate paying any regular dividends on its common stock for the foreseeable future. The Revelyst Board will make all decisions regarding the payment of future dividends, and such decisions will depend on many factors, including Revelyst’s financial condition, earnings, capital requirements of its operating subsidiaries, covenants associated with certain of its debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by the Revelyst Board. Revelyst cannot assure you that it will pay a dividend in the future or continue to pay any dividend if it does commence paying dividends. See also “Risk Factors— Risks Relating to the Revelyst Common Stock— Revelyst does not anticipate paying any regular dividends on its common stock for the foreseeable future, and as a result, your only opportunity to achieve a return on your investment is if the price of Revelyst Common Stock appreciates” beginning on page 61.
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RISK FACTORS
The following sets forth material risks related to the Transaction, the Revelyst Business and the Revelyst Common Stock. You should also carefully consider the information contained or incorporated by reference in this proxy statement/prospectus, including the matters addressed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 64 and the risks of the Vista Outdoor business discussed in Part I, Item 1A—Risk Factors in Vista Outdoor’s Annual Report on Form 10-K for the year ended March 31, 2023, and in Part II, Item 1A—Risk Factors in Vista Outdoor’s Quarterly Report on Form 10-Q for the quarterly period ended December 24, 2023, each incorporated by reference in this proxy statement/prospectus. The risks described below are not the only risks that these businesses face or that Revelyst will face after the consummation of the Transaction. Additional risks and uncertainties not currently known or that are currently expected to be immaterial may also materially and adversely affect Revelyst’s business, financial condition and results of operations or the price of the Revelyst Common Stock in the future. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods.
Risks Related to the Transaction
The consummation of the Transaction is subject to a number of conditions, many of which are largely outside of the control of the parties to the Merger Agreement, and, if these conditions are not satisfied or waived on a timely basis, the Merger Agreement may be terminated and the Transaction may not be completed. If any closing conditions are waived, such waiver could have an adverse effect on Vista Outdoor stockholders and/or Revelyst.
The respective obligations of each party to effect the Merger, and the respective obligations of Vista Outdoor and Merger Sub Parent to effect the Subscription, are subject to the satisfaction (or, to the extent permitted by applicable law, waiver) of certain conditions specified in the Merger Agreement, including, among other things: (i) the approval of the Vista Outdoor stockholders; (ii) any waiting period (or any extension thereof) applicable to the Transaction under the HSR Act having been terminated or having expired, CFIUS approval having been received and approval under the United Kingdom National Security and Investment Act 2021 having been received; (iii) the absence of legal restraints prohibiting the Transaction; (iv) the completion of certain actions required to be taken pursuant to the Separation Agreement prior to consummation of the Merger; (v) the registration statement of which this proxy statement/prospectus forms a part having become effective under the Securities Act and not being the subject of any stop order; (vi) the shares of Revelyst Common Stock to be distributed in connection with the Transaction having been approved for quotation on the NYSE, subject to official notice of issuance; and (vii) other customary conditions specified in the Merger Agreement. The failure to satisfy any or all of the required conditions could delay the completion of the Transaction by a significant period of time or prevent it from occurring. Any delay in completing the Transaction could cause the parties to the Merger Agreement to not realize some or all of the benefits that are expected to be achieved if the Transaction is successfully completed within the expected timeframe. There can be no assurance that the conditions to closing of the Transaction will be satisfied or waived or that the Transaction will be completed within the expected timeframe or at all.
Each party to the Merger Agreement may, to the extent permitted by law, waive any condition that is a condition to the obligations of such party to effect the Merger and/or to effect the Subscription. Conditions that are required by law (such as (i) the approval of the Vista Outdoor stockholders, (ii) any waiting period (or any extension thereof) applicable to the Transaction under the HSR Act having been terminated or having expired, approval from CFIUS having been received and approval under the United Kingdom National Security and Investment Act 2021 having been received, (iii) the absence of legal restraints prohibiting the Transaction and (iv) the registration statement of which this proxy statement/prospectus forms a part having become effective under the Securities Act and not being the subject of any stop order) may not be waived. If the applicable party or parties were to waive a closing condition that may be waived, such waiver could have an adverse effect on Vista Outdoor stockholders and/or Revelyst. For example, (a) if the parties were to waive the condition requiring the completion of certain actions required to be taken pursuant to the Separation Agreement prior to consummation of the Merger, the Revelyst Business and the Sporting Products Business may not be properly separated following the Closing, resulting in legal, administrative and operational challenges and costs; or (b) if the parties were to waive the condition requiring the shares of Revelyst Common Stock to be distributed in connection with the Merger having been approved for
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quotation on the New York Stock Exchange, subject to official notice of issuance, the shares of Revelyst Common Stock issued to Vista Outdoor stockholders at the Closing would not be listed on a stock exchange until the New York Stock Exchange has approved the listing application, and the ability of Vista Outdoor stockholders to trade such shares would be adversely affected.
Failure to complete the Transaction could adversely affect Vista Outdoor’s stock price and business, results of operations or financial condition.
There can be no assurance that the conditions to the closing of the Transaction will be satisfied or waived or that the Transaction will be completed. If the Transaction is not completed within the expected timeframe or at all, Vista Outdoor’s ongoing business could be adversely affected and Vista Outdoor will be subject to a variety of risks and possible consequences associated with the failure to complete the Transaction, including the following: (i) Vista Outdoor will incur certain transaction costs, including legal, accounting, financial advisor, filing, printing and mailing fees, regardless of whether the Transaction closes; (ii) under the Merger Agreement, Vista Outdoor is subject to certain restrictions on the conduct of its business during the pendency of the Transaction, which may adversely affect Vista Outdoor’s ability to execute certain of its business strategies; (iii) Vista Outdoor may lose key employees during the period in which Vista Outdoor and CSG are pursuing the Transaction, which may adversely affect Vista Outdoor in the future if Vista Outdoor is not able to hire and retain qualified personnel to replace departing employees; (iv) the Transaction, whether or not it closes, will divert the attention of certain members of Vista Outdoor management and other key employees from ongoing business activities, including the pursuit of other opportunities that could be beneficial to Vista Outdoor and (v) that another transaction acceptable to Vista Outdoor may not be offered and Vista Outdoor’s business, prospects or results of operation may be adversely impacted as a result. If the Transaction is not completed, these risks could materially affect Vista Outdoor’s business, results of operations or financial condition and stock price, including to the extent that the current market price of the Vista Outdoor Common Stock is positively affected by a market assumption that the Transaction will be completed.
While the Transaction is pending, Vista Outdoor is subject to business uncertainties and certain contractual restrictions that could adversely affect Vista Outdoor’s business, results of operations or financial condition.
In connection with the Transaction, some of Vista Outdoor’s customers, vendors, consumers or other third parties may react unfavorably, including by delaying or deferring decisions concerning their business relationships or transactions with Vista Outdoor, which could adversely affect Vista Outdoor’s revenues, earnings, cash flows and expenses, regardless of whether the Transaction is completed. In addition, due to certain restrictions in the Merger Agreement on the conduct of Vista Outdoor’s business prior to the closing of the Transaction, Vista Outdoor may be unable to (without CSG’s prior written consent, unless another exception under the Merger Agreement applies), during the pendency of the Transaction, pursue certain strategic transactions, undertake significant capital projects, undertake certain significant financing transactions and otherwise pursue other actions, even if such actions would prove beneficial. This may cause Vista Outdoor to forgo certain opportunities it might otherwise pursue. In addition, the pendency of the Transaction may make it more difficult for Vista Outdoor to effectively retain and incentivize key personnel and may cause distractions from Vista Outdoor’s strategy and day-to-day operations for its current employees and management.
The termination fee and restrictions on solicitation contained in the Merger Agreement may discourage other companies from trying to acquire Vista Outdoor or its businesses.
The Merger Agreement prohibits Vista Outdoor from soliciting, initiating or knowingly assisting, facilitating or encouraging any competing acquisition proposals, subject to certain limited exceptions. The Merger Agreement also contains certain termination rights, including, but not limited to, the right of Vista Outdoor to terminate the Merger Agreement to accept a Vista Outdoor Superior Proposal, subject to and in accordance with the terms and conditions of the Merger Agreement, and provides that if the Merger Agreement is terminated under certain circumstances, including by Vista Outdoor to enter into a Vista Outdoor Acquisition Agreement in respect of a Vista Outdoor Superior Proposal, Vista Outdoor will be required to pay CSG a termination fee of $47,750,000 in immediately available funds. The termination fee and non-solicitation restrictions could discourage other companies from trying to acquire Vista Outdoor or its businesses even though those other companies might be willing to offer greater value to Vista Outdoor stockholders than is offered in the Transaction.
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Litigation against Vista Outdoor, CSG or the members of their respective boards could prevent or delay the completion of the Transaction or result in the payment of damages following completion of the Transaction.
It is a condition to the Transaction that no court of competent jurisdiction or other governmental authority shall have issued a judgment, order, injunction, ruling, writ, decree or other directive or enacted a law that is in effect that prohibits, enjoins or makes illegal the consummation of the Transaction. It is possible that lawsuits may be filed by Vista Outdoor stockholders challenging the Transaction. The outcome of any such lawsuits cannot be assured, including the amount of fees and costs associated with defending these claims or any other liabilities that may be incurred in connection therewith. If plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the Transaction on the agreed-upon terms, such an injunction may delay the consummation of the Transaction in the expected timeframe or may prevent the Transaction from being consummated at all. Whether or not any plaintiff’s claim is successful, this type of litigation can result in significant costs and divert Vista Outdoor management’s attention and resources from the closing of the Transaction and ongoing business activities, which could adversely affect Vista Outdoor’s operations.
If the Transaction is not consummated by the applicable deadline, either Vista Outdoor or Merger Sub Parent may terminate the Merger Agreement, subject to certain exceptions.
Either Vista Outdoor or Merger Sub Parent may terminate the Merger Agreement if the Transaction has not been consummated by the End Date. However, this termination right will not be available to Vista Outdoor or Merger Sub Parent (as applicable) if the failure to consummate the Transaction on or prior to such date is primarily due to the breach by such party, or such party’s affiliates who are party to the Merger Agreement, of any Transaction Document. In the event the Merger Agreement is terminated by either party due to the failure of the Transaction to close by the End Date or for any other reason provided under the Merger Agreement, Vista Outdoor will have incurred significant costs and will have diverted significant management focus and resources from other strategic opportunities and ongoing business activities without realizing the anticipated benefits of the Transaction.
Vista Outdoor’s directors and executive officers have interests in the Transaction that may be different from your interests as a stockholder of Vista Outdoor.
In considering the recommendation of the Vista Outdoor Board to approve the Merger, Vista Outdoor stockholders should be aware that directors and executive officers of Vista Outdoor have certain interests in the Transaction that may be different from or in addition to the interests of Vista Outdoor stockholders generally. These interests include the treatment of Vista Outdoor’s equity awards provided for under the Merger Agreement and the Employee Matters Agreement (as described in “Merger Agreement—Adjustments in Respect of Equity Awards; Treatment of Employee Stock Purchase Plan” beginning on page 136), severance and other benefits payable in the case of certain qualifying terminations of employment under the terms of individual employment agreements or Vista Outdoor’s benefit plans, the potential to receive an annual bonus for the post-Closing portion of the fiscal year in which the Closing occurs at the greater of threshold or actual performance levels, the potential to receive cash-based retention awards under a program established for the benefit of certain Sporting Products Employees and continued indemnification and insurance coverage under the Merger Agreement, Vista Outdoor’s organizational documents and any indemnification agreements Vista Outdoor has entered into with its directors and executive officers. See the section entitled “The Transaction—Interests of Vista Outdoor Directors and Executive Officers in the Transaction” beginning on page 114 for a more detailed description of these interests. The Vista Outdoor Board was aware of these interests and considered them, among other things, in evaluating the Transaction and in recommending that the Vista Outdoor stockholders approve the Merger Proposal.
Revelyst may be unable to achieve some or all of the benefits that Revelyst expects to achieve from the Transaction, which could materially adversely affect Revelyst’s business, financial condition and results of operations.
Revelyst believes that, as an independent, publicly traded company, Revelyst will be able to, among other things:
achieve enhanced strategic focus with resources to support Revelyst’s specific operational needs and growth drivers;
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establish tailored capital allocation philosophies that are better suited to support Revelyst’s distinctive business model and long-term goals;
enhance Revelyst’s ability to attract and retain top talent that is ideally suited to execute Revelyst’s strategic and operational objectives;
offer a differentiated and compelling investment opportunity based on Revelyst’s particular business model; and
further cement Revelyst’s reputation as the acquirer of choice through continued M&A in the outdoor recreation products marketplace.
However, Revelyst may not achieve these or other anticipated benefits for a variety of reasons, including, among other things, that:
the Transaction will require a significant amount of Revelyst management’s time and effort, which may divert Revelyst management’s attention from operating and growing Revelyst’s business;
following the Closing, Revelyst will no longer be able to use cash flow from Vista Outdoor’s Sporting Products business to fund the growth of Revelyst;
following the Closing, Revelyst may be more susceptible to market fluctuations, the risk of takeover by third parties and other adverse events because Revelyst’s business will be less diversified than Vista Outdoor’s businesses prior to the Closing; and
the Transaction may require Revelyst to incur significant costs, including accounting, tax, legal and other professional services costs, costs related to retaining and attracting business and operational relationships with customers, suppliers and other counterparties, recruiting and relocation costs associated with hiring key senior management personnel who are new to Revelyst, costs to retain key management personnel, tax costs and costs to shared systems and other dis-synergy costs.
If Revelyst fails to achieve some or all of the benefits that Revelyst expects to achieve as an independent company or does not achieve them in the time Revelyst expects, Revelyst’s business, financial condition and results of operations could be materially adversely affected.
Revelyst may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as an independent, publicly traded company, and Revelyst may experience increased costs after the Closing.
Revelyst has historically operated as part of Vista Outdoor’s corporate organization, and Vista Outdoor has provided Revelyst with various corporate and operational functions. Following the Closing, Vista Outdoor will have no obligation to provide Revelyst with assistance other than the transition services described under the section entitled “Additional Transaction Agreements—Transition Services Agreement” beginning on page 168. These services do not include every service that Revelyst has received from Vista Outdoor in the past, and Vista Outdoor is only obligated to provide these services for limited periods following the Closing. Revelyst will rely on Vista Outdoor to satisfy its performance and payment obligations under the Transition Services Agreement and other agreements related to the Transaction, and if Vista Outdoor does not satisfy such obligations, Revelyst could incur operational difficulties or losses that could materially adversely affect Revelyst’s business, financial condition and results of operations.
Accordingly, following the Closing, Revelyst will need to provide internally or obtain from unaffiliated third parties the services Revelyst currently receives from Vista Outdoor. These services include sales, marketing, procurement, information technology, e-commerce, finance, accounting, tax, human resources, legal, communications, investor relations and other general, administrative and operational functions, the effective and appropriate performance of which is critical to Revelyst’s operations. Revelyst may be unable to replace these services in a timely manner or on terms and conditions as favorable as those Revelyst receives from Vista Outdoor. Because Revelyst’s business has historically operated as part of the larger Vista Outdoor organization, Revelyst may be unable to successfully establish the infrastructure or implement the changes necessary to operate independently,
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or may incur additional costs. If Revelyst fails to obtain the quality of services necessary to operate effectively or incur greater costs in obtaining these services, Revelyst’s business, financial condition and results of operations could be materially adversely affected.
In addition, following the Closing, pursuant to the Transition Services Agreement that Revelyst will enter into with Vista Outdoor, Revelyst will provide to Vista Outdoor, on a transitional basis, certain services or functions transferred to Revelyst in connection with the Transaction that the Revelyst Business and the Sporting Products Business have historically shared. See the section entitled “Additional Transaction Agreements—Transition Services Agreement” beginning on page 168. Performing Revelyst’s obligations under the Transition Services Agreement may require significant time and resources, and may divert management’s attention from the operation of the Revelyst Business.
Revelyst has no operating history as an independent, publicly traded company, and Revelyst’s historical and pro forma financial data is not necessarily representative of the results Revelyst would have achieved if Revelyst had been an independent, publicly traded company and may not be a reliable indicator of Revelyst’s future results.
Revelyst derived its historical and pro forma financial data included in this proxy statement/prospectus from Vista Outdoor’s consolidated financial statements, and this data does not necessarily reflect the results of operations and financial position Revelyst would have achieved as an independent, publicly traded company during the periods presented, or those that Revelyst will achieve in the future. This is primarily because of the following factors:
Revelyst’s working capital requirements and capital for general corporate purposes, including capital expenditures and acquisitions, have been historically satisfied through Vista Outdoor’s corporate-wide cash management practices. Following the Closing, Revelyst’s results of operations may be more volatile, and Revelyst may need to obtain additional financing from banks or through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements, which may not be available or may be more costly.
Revelyst has historically operated as part of Vista Outdoor’s broader corporate organization, and Vista Outdoor or one of its affiliates has performed various corporate and operational functions for Revelyst, such as sales, marketing, procurement, information technology, e-commerce, finance, accounting, tax, human resources, legal, communications, investor relations and other general, administrative and operational functions. Revelyst’s historical financial data reflects allocations of corporate expenses from Vista Outdoor for these and similar functions. These allocations may not reflect the costs Revelyst will incur for similar services in the future as an independent, publicly traded company.
Revelyst will enter into transactions with Vista Outdoor that do not exist prior to the Closing, such as Vista Outdoor’s and Revelyst’s provision of transition services to each other (which are described in more detail under the section entitled “Additional Transaction Agreements—Transition Services Agreement” beginning on page 168), which will cause Revelyst to incur new costs for the transition services provided by Vista Outdoor to Revelyst and for the transition services provided by Revelyst to Vista Outdoor.
Revelyst’s historical financial data does not reflect changes that Revelyst expects to experience in the future as a result of its separation from Vista Outdoor. As part of Vista Outdoor, Revelyst enjoyed certain benefits from Vista Outdoor’s operating diversity, size, purchasing power, credit rating, borrowing leverage and available capital for investments, and Revelyst will lose these benefits after the Closing. As an independent entity, Revelyst may be unable to purchase goods, services and technologies, such as insurance and health care benefits, or access capital markets, on terms as favorable to Revelyst as those Revelyst obtained as part of Vista Outdoor prior to the Closing.
Following the Closing, the cost of capital for Revelyst’s business may be higher than Vista Outdoor’s cost of capital prior to the Closing.
As an independent public company, Revelyst will separately become subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002 and will be required to prepare its standalone financial statements according to the rules and regulations established by the SEC. These reporting and
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other obligations will place significant demands on its management and on administrative and operational resources. Moreover, to comply with these requirements, Revelyst will need to migrate its systems, including information technology systems, to new Revelyst systems, implement additional financial and management controls, reporting systems and procedures, and hire additional accounting and finance staff. Revelyst expects to incur additional annual expenses related to these requirements, and those expenses may be significant. If Revelyst is unable to upgrade its financial and management controls, reporting systems, information technology and procedures in a timely and effective fashion, Revelyst’s ability to comply with its financial reporting requirements and other rules that apply to reporting companies under the Exchange Act could be impaired.
Other significant changes may occur in Revelyst’s cost structure, management, financing and business operations as a result of operating as an independent, publicly traded company. As such, Revelyst’s historical financial data may not be indicative of its future performance as an independent, publicly traded company. For additional information about Revelyst’s past financial performance and the basis of presentation of its financial statements, see the sections entitled “Summary Historical and Unaudited Pro Forma Condensed Combined Financial Data of Revelyst,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Revelyst” and “Unaudited Pro Forma Condensed Combined Financial Statements of Revelyst” beginning on pages 31, 186 and 204, respectively, and the Revelyst combined financial statements and the notes thereto included elsewhere in this proxy statement/prospectus.
Revelyst expects that the terms of the new revolving credit facility that Revelyst intends to enter into concurrently with or prior to the Closing will restrict Revelyst’s current and future operations, particularly Revelyst’s ability to incur debt that it may need to fund initiatives in response to changes in Revelyst’s business, the industries in which Revelyst operates, the economy and governmental regulations.
Revelyst expects that the terms of the new revolving credit facility Revelyst intends to enter into concurrently with or prior to the Closing will include a number of restrictive covenants that impose significant operating and financial restrictions on Revelyst and its subsidiaries and limit Revelyst’s ability to engage in actions that may be in Revelyst’s long-term best interests. These may restrict Revelyst’s and its subsidiaries’ ability to take some or all of the following actions:
incur or guarantee additional indebtedness or sell disqualified or preferred stock;
pay dividends on, make distributions in respect of, repurchase or redeem capital stock;
make investments or acquisitions;
sell, transfer or otherwise dispose of certain assets, including accounts receivable;
create liens;
enter into agreements restricting the ability to pay dividends or make other intercompany transfers;
consolidate, merge, sell or otherwise dispose of all or substantially all of Revelyst’s or its subsidiaries’ assets;
enter into transactions with affiliates;
prepay, repurchase or redeem certain kinds of indebtedness;
issue or sell stock of Revelyst’s subsidiaries; and/or
significantly change the nature of Revelyst’s business.
As a result of all of these restrictions, Revelyst may be:
limited in how it conducts its business and pursues its strategy;
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unable to raise additional debt financing to operate during general economic or business downturns; or
unable to compete effectively or to take advantage of new business opportunities.
A breach of any of these covenants, if applicable, could result in an event of default under the terms of this indebtedness. If an event of default occurs, the lenders would have the right to accelerate the repayment of such indebtedness and the event of default or acceleration may result in the acceleration of the repayment of any other of Revelyst’s indebtedness to which a cross-default or cross-acceleration provision applies. Furthermore, the lenders of this indebtedness may require that Revelyst pledge its assets as collateral as security for its repayment obligations. If Revelyst were unable to repay any amount of this indebtedness when due and payable, the lenders could proceed against the collateral that secures this indebtedness. In the event Revelyst’s creditors accelerate the repayment of its borrowings, Revelyst may not have sufficient assets to repay such indebtedness, which could materially adversely affect its results of operations and financial condition.
Following the Closing, Revelyst may be unable to, or the Revelyst Board may otherwise decide not to, return the cash on hand that is in excess of $250 million to Revelyst stockholders in the form of a share buyback or a special dividend.
Currently, Revelyst expects that following the Closing, Revelyst will return cash on hand that is in excess of $250 million to Revelyst stockholders in the form of a share buyback or special dividend. However, Revelyst may be unable to, or the Revelyst Board may otherwise decide not to, consummate such share buyback or special dividend for reasons including, but not limited to, unforeseen events which adversely affect Revelyst’s results of operations or financial condition and necessitate the retention of such cash for use in Revelyst’s business, challenges in obtaining financing to fund Revelyst’s working capital needs and acquisition strategy on terms that are acceptable to Revelyst, changes in Revelyst’s liquidity and capital resources strategy and new or increased capital expenditure obligations. The decision to consummate a share buyback or a special dividend and the timing and amount thereof, if any, is in the sole discretion of the Revelyst Board and will depend on such factors as are deemed relevant by the Revelyst Board at the time of such decision.
The transfer to Revelyst by Vista Outdoor of certain contracts, permits and other assets and rights may require the consents or approvals of, or provide other rights to, third parties and governmental authorities. If such consents or approvals are not obtained, Revelyst may not be entitled to the benefit of such contracts, permits and other assets and rights, which could increase Revelyst’s expenses or otherwise harm Revelyst’s business and financial performance.
The Separation Agreement provides that certain contracts, permits and other assets and rights are to be transferred from Vista Outdoor or its subsidiaries to Revelyst or Revelyst’s subsidiaries in connection with the Separation. The transfer of certain of these contracts, permits and other assets and rights may require consents or approvals of third parties or governmental authorities or provide other rights to third parties. In addition, in some circumstances, Revelyst and Vista Outdoor are joint beneficiaries of contracts or permits, and Revelyst and Vista Outdoor may need the consents of third parties in order to split, separate, replace, novate or replicate the existing contracts or permits or the relevant portions of the existing contracts or permits. While Revelyst anticipates dividing, partially assigning, modifying or replicating such contracts or permits where necessary or entering into new contracts or obtaining new permits, Revelyst may not be successful in doing so in certain instances.
Some third parties may seek to use consent requirements or other rights to terminate contracts or obtain more favorable contractual terms from Revelyst, which could, for example, take the form of price increases, require Revelyst to expend additional resources in order to obtain the services or assets previously provided under the contract or require Revelyst to make arrangements with new third parties or obtain letters of credit or other forms of credit support. If Revelyst does not obtain required consents or approvals, Revelyst may be unable to obtain the benefits of the contracts, permits and other assets and rights that are intended to be allocated to Revelyst as part of Revelyst’s separation from Vista Outdoor, and Revelyst may be required to seek alternative arrangements to obtain services and assets which may be more costly and of lower quality. The termination, modification, replacement or replication of these contracts or permits or the failure to timely complete the transfer or separation of these contracts or permits could materially adversely affect Revelyst’s business, financial condition and results of operations.
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Potential indemnification obligations of Revelyst in connection with the Transaction could adversely affect Revelyst’s business, results of operations or financial condition.
Pursuant to the Separation Agreement, Revelyst is required to indemnify Vista Outdoor and the other members of the Sporting Products Group for substantially all income tax liabilities of Vista Outdoor and such other Group members for tax periods ending on or prior to the Closing Date, as well as any taxes that are attributable to the consummation of the Transaction (in each case reduced by any insurance proceeds or other third-party proceeds received by the indemnified party). If the Internal Revenue Service (the “IRS”) or other taxing authority asserts any such taxes that exceed expected amounts, and Revelyst is required to indemnify Vista Outdoor for such taxes, Revelyst may be subject to substantial liabilities, which could adversely affect Revelyst’s business, results of operations or financial condition. See “Separation Agreement—Taxes” beginning on page 165.
Risks Related to the Revelyst Business
Revelyst may not be able to successfully implement the acquisition component of Revelyst’s strategic leverage strategy, particularly if Revelyst is unable to raise the capital necessary to finance acquisitions.
Revelyst’s business strategy includes strategic leverage through targeted acquisitions and Revelyst regularly evaluates possible acquisition candidates. Revelyst may fail to identify attractive acquisition candidates, be unable to raise sufficient capital to compete for acquisition targets or be unable to reach acceptable terms for proposed acquisitions. If Revelyst is unable to complete acquisitions in the future, its ability to grow its business at the rate anticipated by Revelyst will be impaired. Revelyst may also incur costs pursuing acquisitions that do not close, which could significantly impact its financial condition or results of operations.
Historically, an important source of funds for Revelyst’s acquisitions has been cash generated by the Sporting Products segment of Vista Outdoor. Following the Closing, Revelyst’s ability to fund acquisitions will depend on Revelyst’s ongoing ability to independently generate cash from operations and obtain additional capital on acceptable terms. Revelyst’s ability to generate sufficient positive cash flows from operations to support Revelyst’s desired acquisition growth strategy is subject to many risks and uncertainties, including future economic trends and conditions, demand for Revelyst’s products and other risks and uncertainties related to Revelyst’s business. Moreover, potential acquisitions may require Revelyst to issue additional shares of common stock or obtain new debt financing in order to supplement cash available from Revelyst’s operations. Adequate financing may not be available on terms acceptable to Revelyst or at all. In addition, equity financing could result in dilution to existing stockholders, and debt financing could include terms that restrict Revelyst’s ability to operate its business or pursue other opportunities and could subject Revelyst to meaningful debt service obligations.
Additionally, Revelyst’s success depends in part on Revelyst’s ability to successfully integrate the business and operations of companies that it acquires. Revelyst cannot assure you that the expected benefits of any future acquisitions or other transactions will be realized. After any acquisition, unforeseen issues and/or costs could arise that adversely affect Revelyst’s anticipated returns or that are otherwise not recoverable as an adjustment to the purchase price. Even after careful integration efforts, actual results of operations may vary significantly from initial estimates due to a variety of factors, including general economic conditions affecting the market for Revelyst’s products. Revelyst may also engage in other strategic business transactions, that, likewise, could result in unanticipated costs and difficulties, may not achieve intended results and may require significant time and attention from management.
Risks may also include potential delays in adopting Revelyst’s financial and managerial controls and reporting systems and procedures, greater than anticipated costs and expenses related to the integration of the acquired business with Revelyst’s business, potential unknown liabilities associated with the acquired company, employee retention, challenges inherent in effectively managing an increased number of employees in diverse locations and the challenge of creating uniform standards, controls, procedures, policies and information systems. These and other risks relating to Revelyst’s acquisitions could have an adverse effect on Revelyst’s business, financial condition or results of operations.
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General economic conditions may adversely affect Revelyst’s business, results of operations and financial condition, including by creating the potential for future impairments of goodwill and other intangible and long-lived assets.
Revelyst’s revenues are affected by general economic conditions and consumer confidence worldwide, but especially in the U.S. In times of economic uncertainty, consumers tend to defer expenditures for discretionary items, which affects demand for Revelyst’s products. Macroeconomic developments such as the global or regional effects of the war in Ukraine, the Israel-Gaza conflict, high rates of inflation and related economic curtailment initiatives, a pandemic, epidemic or infectious disease outbreak, evolving trade policies between the U.S. and international trade partners or the occurrence of similar events in other countries that lead to uncertainty or instability in economic, political or market conditions could adversely affect Revelyst’s business, operating results, financial condition and outlook. Moreover, Revelyst’s businesses are cyclical in nature, and their success is impacted by general economic conditions and specific economic conditions affecting the regions and markets Revelyst serves, the overall level of consumer confidence in the economy and discretionary income levels. Any substantial deterioration in general economic conditions that diminishes consumer confidence or discretionary income could reduce Revelyst’s sales and adversely affect Revelyst’s financial results. For example, during the second quarter of fiscal year 2023, high interest rates and other short-term factors affecting consumers’ purchases of consumer durable goods had a negative impact on Revelyst’s sales.
Furthermore, declining economic conditions create the potential for future impairments of goodwill and other intangible and long-lived assets that may negatively impact Revelyst’s financial condition or results of operations, such as the impairment charges that Revelyst recorded in fiscal year 2023 to its goodwill and identifiable indefinite-lived intangible assets. The impact of weak consumer credit markets, corporate restructurings, high retail inventory, layoffs, high unemployment rates, declines in the value of investments and residential real estate, higher fuel prices and increases in federal and state taxation can also negatively affect Revelyst’s results of operations.
In recent periods, sluggish economies and consumer uncertainty regarding future economic prospects in Revelyst’s key markets have had an adverse effect on the financial health of certain of Revelyst’s customers, which may in turn have a material adverse effect on Revelyst’s results of operations and financial condition. Revelyst extends credit to its customers for periods of varying duration based on an assessment of the customer’s financial condition, generally without requiring collateral, which increases Revelyst’s exposure to the risk of uncollectible receivables. In addition, Revelyst faces increased risk of order reduction or cancellation when dealing with financially ailing customers or customers struggling with economic uncertainty. For example, Revelyst’s risk of uncollectible receivables and order cancellations has been elevated due to retail store closures that occurred during the height of the global COVID-19 pandemic (which adversely affected many of Revelyst’s customers), credit tightening and inflation and may be further elevated in the event of bank failures affecting Revelyst’s customers. Revelyst may reduce its level of business with customers and distributors experiencing financial difficulties and may not be able to replace that business with other customers, which could have a material adverse effect on Revelyst’s financial condition, results of operations or cash flows. In times of uncertain economic conditions there is also increased risk that inventories may not be liquidated in an efficient manner and may result in Revelyst having excess levels of inventory.
Significant supplier capacity constraints, supplier production disruptions, supplier quality issues or price increases could increase Revelyst’s operating costs and adversely impact the competitive positions of Revelyst’s products.
Revelyst relies on third-party suppliers to produce a significant majority of the products Revelyst sells. Revelyst’s reliance on third-party suppliers for various product components and finished goods exposes Revelyst to volatility in the availability, quality and price of these product components and finished goods. A disruption in deliveries from Revelyst’s third-party suppliers, including as a result of natural disasters, public health crises or other significant catastrophic events such as a pandemic, epidemic or infectious disease outbreak, capacity constraints, production disruptions, price increases or decreased availability of raw materials or commodities could have an adverse effect on Revelyst’s ability to meet its commitments to customers or increase its operating costs.
Revelyst’s inability to obtain sufficient quantities of components, parts, raw materials or other supplies from independent sources necessary for the production of Revelyst’s products could result in reduced or delayed sales or
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lost orders. Any delay in or loss of sales or orders could adversely impact Revelyst’s results of operations. Many of the components, parts, raw materials and other supplies used in the production of Revelyst’s products are available only from a limited number of suppliers. Revelyst does not have long-term supply contracts with all of Revelyst’s suppliers. As a result, Revelyst could be subject to increased costs, supply interruptions and difficulties in obtaining materials. Revelyst’s suppliers also may encounter difficulties or increased costs in obtaining the materials necessary to produce their products that Revelyst uses in Revelyst’s products. The time lost in seeking and acquiring new sources could have an adverse effect on Revelyst’s business, financial condition or results of operations.
In addition, Revelyst’s supply contracts are generally not exclusive. As a result, supplies Revelyst may need may be allocated to other customers, such as where necessary to fulfill priority orders to the government or during times of elevated demand. Additionally, Revelyst’s suppliers may provide similar supplies and materials to Revelyst’s competitors, some of whom could potentially purchase these supplies and materials in significantly greater volume than Revelyst does. Revelyst’s competitors could enter into restrictive or exclusive arrangements with these suppliers that could impair or eliminate Revelyst’s access to necessary supplies and materials.
Quality issues experienced by third-party suppliers could also adversely affect the quality and effectiveness of Revelyst’s products and result in liability and reputational harm.
Shortages of, and price increases for, labor, components, parts and other supplies, as well as commodities used in the manufacturing and distribution of Revelyst’s products, may delay or reduce Revelyst’s sales and increase Revelyst’s costs, thereby harming Revelyst’s results of operations.
Revelyst manufactures a portion of its products at plants that it operates. Shortages of, or cost increases for, labor or other inputs to the manufacturing and distribution process could delay or reduce Revelyst’s sales or gross margins and thereby have an adverse effect on Revelyst’s financial condition and results of operations.
Although Revelyst manufactures many of the components for Revelyst’s products, Revelyst purchases from third parties certain important components, finished goods and raw materials. The costs of these components, finished goods and raw materials are affected by increases in input costs and are, therefore, subject to price volatility caused by weather, market conditions, overall inflationary pressures and other factors that are not predictable or within Revelyst’s control, including natural disasters and public health crises or other significant catastrophic events, such as a pandemic, epidemic or infectious disease outbreak.
Higher prices for electricity, natural gas, microchips, metals, transportation and fuel also increase Revelyst’s production and shipping costs. A significant shortage, increased prices or interruptions in the availability of these commodities and components would increase the costs of producing and delivering products to Revelyst’s customers and would be likely to negatively affect Revelyst’s earnings. Commodity costs have varied significantly during recent fiscal years and remain a volatile element of Revelyst’s costs.
Revelyst’s business could be adversely impacted by inflation and high interest rates.
General inflation in the U.S., Europe and other geographies has risen to levels not experienced in recent decades, which could have negative impacts on Revelyst’s business by increasing Revelyst’s operating costs and borrowing costs, as well as decreasing the disposable income available for consumers to purchase Revelyst’s products. In addition, recent interest rate increases aimed at curbing inflation could have a dampening effect on overall economic activity and could make it difficult for Revelyst to obtain financing at attractive rates, which could impair Revelyst’s ability to raise sufficient capital to execute its business plans, including its growth strategy and future acquisitions. As a result, Revelyst’s financial condition, results of operations and cash flows could be adversely affected.
Seasonality and weather conditions may cause Revelyst’s results of operations to vary from quarter to quarter.
Because many of the products Revelyst sells are used for seasonal outdoor activities, Revelyst’s results of operations may be significantly impacted by unseasonable weather conditions. For example, Revelyst’s winter sport accessories sales are dependent on cold winter weather and snowfall and can be negatively impacted by unseasonably warm or dry weather. Conversely, sales of Revelyst’s spring and summer products, such as golf accessories, can be adversely impacted by unseasonably cold or wet weather. In addition, sales of Revelyst’s hunting
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accessories are highest during the fall hunting season and winter holidays. Accordingly, Revelyst’s sales results and financial condition will typically suffer when weather patterns or seasonal spending patterns do not conform to seasonal norms.
The seasonality of Revelyst’s sales may change in the future. Seasonal variations in Revelyst’s results of operations may reduce Revelyst’s cash on hand, increase its inventory levels and extend its accounts receivable collection periods. This in turn may cause Revelyst to increase its debt levels and interest expense to fund its working capital requirements.
Climate change may adversely impact Revelyst’s business.
There is increasing concern that a gradual increase in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere will cause significant changes in weather patterns around the globe and an increase in the frequency and severity of natural disasters. Physical risks presented by climate change, including increased frequency, intensity and duration of extreme weather conditions, could, among other things, disrupt the operation of Revelyst’s supply chain or increase its product costs. Changes in weather patterns could also impact the types and amounts of Revelyst’s products that consumers purchase by adversely affecting the open spaces where consumers recreate or shortening or changing the seasons in which consumers participate in their chosen outdoor activity. Additionally, efforts to transition to a lower carbon economy could also disrupt Revelyst’s business, such as by increasing Revelyst’s product costs or increasing the costs of travel, which could affect consumer spending on outdoor recreation. As a result, the effects of climate change could have short- and long-term adverse impacts on Revelyst’s business and results of operations.
Revelyst’s revenues and results of operations may fluctuate unexpectedly from quarter-to-quarter, which may cause Revelyst’s stock price to decline.
Revelyst’s revenues and results of operations have fluctuated significantly in the past and may fluctuate significantly in the future due to various factors, including, but not limited to:
market acceptance of Revelyst’s products and services;
general economic conditions, including inflation and/or recession;
the timing of large domestic and international orders;
cancellation of existing orders;
the outcome of litigation;
adverse publicity surrounding Revelyst’s products, the safety of Revelyst’s products or the use of Revelyst’s products;
changes in Revelyst’s sales mix;
new product introduction costs;
high levels of retailer and distributor inventory;
complexity in Revelyst’s integrated supply chain;
increased raw material and/or other commodity expenses;
changes in amount and/or timing of Revelyst’s operating expenses;
natural disasters and public health crises or other significant catastrophic events, such as a pandemic, epidemic or infectious disease outbreak, in markets in which Revelyst and Revelyst’s customers, suppliers and manufacturers operate;
changes in laws and regulations that may affect the marketability of Revelyst’s products;
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the domestic political environment;
uncertainties related to changes in macroeconomic and/or global conditions, including as a result of the war in Ukraine, the imposition of sanctions on Russia and the Israel-Gaza conflict;
risks relating to foreign trade;
tariffs;
import and export controls; and
fluctuations in currency exchange rates (particularly the Euro, the British pound, the Chinese renminbi (yuan) and the Canadian dollar).
As a result of these and other factors, Revelyst believes that period-to-period comparisons of Revelyst’s results of operations may not be meaningful in the short term, and Revelyst’s performance in a particular period may not be indicative of Revelyst’s performance in any future period.
Goodwill and intangible assets represent a significant portion of Revelyst’s total assets, and any impairment of these assets could negatively impact Revelyst’s results of operations and parent company equity.
Revelyst’s goodwill and identifiable intangible assets consist of goodwill from acquisitions, trademarks and trade names, patented technology, customer relationships and other intangible assets. Accounting rules require the evaluation of Revelyst’s goodwill and indefinite-lived intangible assets for impairment at least annually or upon the occurrence of events or changes in circumstances that indicate that the assets might be impaired. Such indicators include a sustained decline in Revelyst’s stock price or market capitalization, adverse changes in economic or market conditions or prospects and changes in Revelyst’s operations.
An asset is considered to be impaired when its carrying value exceeds its fair value. If, due to declining market conditions or other factors, a significant amount of Revelyst’s goodwill or other identifiable intangible assets were deemed to be impaired, Revelyst’s business, financial condition and results of operations could be negatively affected. For example, in fiscal year 2023, Revelyst recorded impairment charges to its goodwill and identifiable indefinite-lived intangible assets. In addition, Vista Outdoor has recorded impairment charges to the goodwill and identifiable indefinite-lived intangible assets of its Outdoor Products segment in recent years prior to fiscal year 2023.
Revelyst’s results of operations could be materially harmed if Revelyst is unable to accurately forecast demand for its products.
Revelyst often schedules internal production, places orders and, at times, pre-pays for products, components and materials with third-party suppliers before receiving firm orders from Revelyst’s customers. In addition, orders from customers are generally subject to cancellation at any time before acceptance. If Revelyst fails to accurately forecast customer demand or if orders are cancelled before delivery, Revelyst may experience excess inventory levels or a shortage of products to deliver to Revelyst’s customers. Factors that could affect Revelyst’s ability to accurately forecast demand for Revelyst’s products include:
an increase or decrease in consumer demand for Revelyst’s products or for the products of Revelyst’s competitors;
Revelyst’s failure to accurately forecast customer acceptance of new products;
new product introductions by competitors;
changes in Revelyst’s relationships with customers;
changes in general market conditions or other factors, which may result in cancellations of orders or a reduction or increase in the rate of reorders placed by retailers, including as a result of natural disasters and
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public health crises or other significant catastrophic events, such as a pandemic, epidemic or infectious disease outbreak;
changes in laws and regulations governing the activities for which Revelyst sells products, such as hunting and shooting sports;
weak economic conditions or consumer confidence or inflation, which could reduce demand for discretionary items such as Revelyst’s products; and
the domestic political environment.
Inventory levels in excess of customer demand may result in inventory write-downs and the sale of excess inventory on less favorable terms, including discounted prices or payment terms, which could have an adverse effect on Revelyst’s business, financial condition or results of operations. If Revelyst underestimates demand for Revelyst’s products, Revelyst’s manufacturing facilities or third-party suppliers may not be able to create products to meet customer demand, and this could result in delays in the shipment of products and lost revenues, as well as damage to Revelyst’s reputation and customer relationships. Revelyst may not be able to manage inventory levels successfully to meet future order and reorder requirements.
A disruption or a significant increase in the cost of Revelyst’s primary delivery and shipping services for Revelyst’s products and component parts or a significant disruption at shipping ports could have a negative impact on Revelyst’s business.
Revelyst uses various carriers, including Federal Express (“FedEx”), for ground shipments of products to Revelyst’s U.S. customers. Revelyst uses air carriers and ocean shipping services for most of Revelyst’s international shipments of products. Furthermore, many of Revelyst’s finished goods and many of the components Revelyst uses to manufacture its products are shipped to Revelyst via air carrier and shipping services. If there is any continued or additional significant interruption in service by such providers or at airports or shipping ports in the future, Revelyst may be unable to engage alternative suppliers or to receive or ship goods through alternate sites in order to deliver Revelyst’s products or receive finished goods or components in a timely and cost-efficient manner. As a result, Revelyst could experience manufacturing delays, increased manufacturing and shipping costs and lost sales as a result of missed delivery deadlines and product demand cycles. Any significant interruption in FedEx services, other ground carriers, air carrier services, ship services or at airports or shipping ports could have a negative impact on Revelyst’s business. Furthermore, if the cost of delivery or shipping services increases significantly and the additional costs cannot be covered by product pricing, Revelyst’s operating results could be materially adversely affected.
Revelyst faces risks relating to Revelyst’s international business operations that could adversely affect Revelyst’s business, financial condition or results of operations.
Revelyst’s ability to maintain the current level of operations in Revelyst’s existing international markets and to capitalize on growth in existing and new international markets is subject to risks associated with Revelyst doing business internationally, including:
issues related to managing international operations;
potentially adverse tax developments;
lack of sufficient protection for intellectual property in some countries;
fluctuations in currency exchange rates (particularly the Euro, the British pound, the Chinese renminbi (yuan) and the Canadian dollar);
tariffs;
import and export controls;
social, political and economic instability in the countries in which Revelyst operates;
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changes in economic conditions;
inflation and/or recession;
uncertainties related to changes in macroeconomic and/or global conditions, including as a result of the war in Ukraine, the imposition of sanctions on Russia and the Israel-Gaza conflict;
the occurrence of natural disasters, public health crises or other significant catastrophic events, such as a pandemic, epidemic or infectious disease outbreak, in countries in which Revelyst operates;
local laws and regulations, including those governing labor, product safety and environmental protection;
changes to international treaties and regulations; and
limitations on Revelyst’s ability to efficiently repatriate cash from its foreign operations.
Any one or more of these risks could adversely affect Revelyst’s business, financial condition or results of operations.
Some of Revelyst’s products contain licensed, third-party technology that provides important product functionality and features. The loss of or inability to obtain and maintain any such licenses could have a material adverse effect on Revelyst’s business.
Some of Revelyst’s products contain technology licensed from third parties that provides important product functionality and features. Revelyst cannot assure you that Revelyst will have continued access to this technology. For example, if the licensing company ceases to exist, either as a result of bankruptcy, dissolution or purchase by a competitor, Revelyst may lose access to important third-party technology and may not be able to obtain replacement technology on favorable terms or at all. In addition, legal actions, such as intellectual property actions, brought against the licensing company could impact Revelyst’s future access to the technology. Any of these actions could negatively affect Revelyst’s technology licenses, thereby reducing the functionality and features of Revelyst’s products, and adversely affect Revelyst’s business, financial condition or results of operations.
Failure to attract and retain key personnel could have an adverse effect on Revelyst’s results of operations.
Revelyst’s future success will depend in part on the continued service of key personnel and Revelyst’s ability to attract, retain and develop key managers, designers, sales and information technology professionals and others. Competition for experienced executives and skilled employees in some areas is high, and Revelyst may experience difficulty in recruiting and retaining employees, particularly given the Transaction. Any inability to attract qualified new employees or retain existing employees may have a material adverse effect on Revelyst’s financial condition, results of operations or cash flows.
Catastrophic events may disrupt Revelyst’s business.
A disruption or failure of Revelyst’s systems or operations in the event of a major earthquake, weather event, public health crisis (such as a pandemic), cyber-attack, terrorist attack or other catastrophic event could cause delays in completing sales, providing services or performing other mission-critical functions. A catastrophic event that results in the destruction or disruption of any of Revelyst’s critical businesses or information technology systems could harm Revelyst’s ability to conduct normal business operations and Revelyst’s results of operations.
In addition, damage or disruption to Revelyst’s manufacturing and distribution capabilities or those of Revelyst’s suppliers because of a major earthquake, weather event, public health crisis, cyber-attack, terrorist attack or other catastrophic event could impair Revelyst’s ability or Revelyst’s suppliers’ ability to manufacture or sell Revelyst’s products. If Revelyst does not take steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, such events could have a material adverse effect on Revelyst’s business, financial condition or results of operations, as well as require additional resources to restore Revelyst’s supply chain.
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Revelyst’s sales are highly dependent on purchases by several large customers, and Revelyst may be adversely affected by the loss of, or any significant decline in sales to, one or more of these customers.
The U.S. retail and distribution industries serving the outdoor recreation market have become relatively concentrated. Sales to Revelyst’s top ten customers accounted for approximately 23%, 33% and 40% of Revelyst’s combined net sales in fiscal years 2023, 2022 and 2021, respectively.
No one customer contributed greater than 10% of sales in fiscal year 2023. Walmart contributed 10% and 12% of sales during fiscal years 2022 and 2021, respectively. Further consolidation in the U.S. retail industry could increase the concentration of Revelyst’s retail store customer base in the future.
Although Revelyst has long-established relationships with many of Revelyst’s customers, as is typical in the markets in which it competes, Revelyst generally does not have long-term sales agreements with its customers. As such, Revelyst is dependent on individual purchase orders. As a result, prior to acceptance, these customers are able to cancel their orders, change purchase quantities from forecast volumes, delay purchases, change other terms of Revelyst’s business relationship or cease to purchase Revelyst’s products entirely. Revelyst’s customers’ purchasing activity may also be impacted by general economic conditions as well as natural disasters and public health crises or other significant catastrophic events, such as a pandemic, epidemic or infectious disease outbreak.
The loss of any one or more of Revelyst’s large customers, significant or numerous cancellations, reductions, delays in purchases or payments or changes in business practices by Revelyst’s large customers could have an adverse effect on Revelyst’s business, financial condition or results of operations, including but not limited to reductions in sales volumes and profits, inability to collect receivables and increases in inventory levels.
Insolvency, credit problems or other financial difficulties that could confront Revelyst’s retailers or distributors could expose Revelyst to financial risk.
Revelyst sells to the large majority of retail customers on open account terms and does not require collateral or a security interest in the inventory that it sells to such customers. Consequently, Revelyst’s accounts receivable for its retail customers are unsecured. Revelyst also relies on third-party distributors to distribute Revelyst’s products to Revelyst’s retail and direct-to-consumer customers. Insolvency, credit problems or other financial difficulties confronting Revelyst’s retailers or distributors could expose Revelyst to financial risk. These events could expose Revelyst to risks if Revelyst’s distributors are unable to distribute Revelyst’s products to Revelyst’s customers and/or if Revelyst’s retail customers are unable to pay for the products that they purchase from Revelyst in a timely matter or at all. Financial difficulties of Revelyst’s retailers could also cause them to reduce their sales staff, use of attractive displays, or number or size of stores or the amount of floor space dedicated to Revelyst’s products. Any reduction in sales by, or loss of, Revelyst’s current retailers or customer demand, or credit risks associated with Revelyst’s retailers or distributors, could harm Revelyst’s business, results of operations and financial condition.
Competition in Revelyst’s industry may hinder Revelyst’s ability to execute Revelyst’s business strategy, maintain profitability or maintain relationships with existing customers.
Revelyst operates in a highly competitive industry and competes against other manufacturers that have well-established brand names and strong market positions. Given the diversity of Revelyst’s product portfolio, Revelyst has various significant competitors in each of Revelyst’s markets, including: Alpine Stars, Bontrager, Canyon, Schwinn, Shimano, Shoei, Smith, Specialized, Contigo, Hydro Flask, Osprey, Nalgene and Yeti in its Adventure Sports segment; Garmin, Nikon, SkyTrak, Topgolf Callaway and Trackman in its Precision Sports Technology segment; and Huk, Orvis, Patagonia, Caldwell, Covert Optics, Nikon, Leupold, Rhino, Vortex, Wheeler, Coleman, Traeger, Weber, Kuiu, First Lite, Mystery Ranch and Sitka in its Outdoor Performance segment.
Competition in the markets in which Revelyst operates is based on a number of factors, including price, quality, product innovation, performance, reliability, styling, product features and warranties, as well as sales and marketing programs. Competition could result in price reductions, reduced profits, extensions of credit or losses or loss of market share, any of which could have a material adverse effect on Revelyst’s business, financial condition or results of operations. Certain of Revelyst’s competitors may be more diversified than Revelyst or may have financial and marketing resources that are substantially greater than those of Revelyst, which may allow them to
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invest more heavily in intellectual property, product development and advertising. Since many of Revelyst’s competitors also source their products from third parties, Revelyst’s ability to obtain a cost advantage through sourcing is limited.
Certain of Revelyst’s competitors may be willing to reduce prices and accept lower profit margins or extend more credit to compete with Revelyst. Further, retailers often demand that suppliers reduce their prices on mature products, which could lead to lower margins.
Revelyst’s products typically face more competition internationally where foreign competitors manufacture and market products in their respective countries, which allows those competitors to sell products at lower prices, which could adversely affect Revelyst’s competitiveness.
In addition, Revelyst’s products compete with many other outdoor products for the discretionary spending of consumers. Failure to effectively compete with these competitors or alternative products could have a material adverse effect on Revelyst’s performance.
Revelyst’s success depends upon its ability to introduce new compelling products into the marketplace and respond to customer preferences.
Revelyst’s efforts to introduce new products into the marketplace may not be successful, and any new products that Revelyst introduces may not result in customer or market acceptance. Revelyst both develops and sources new products and components that it believes will match customer preferences. The development of new products is a lengthy and costly process and may not result in the development of a successful product. In addition, the sourcing of Revelyst’s products and components is dependent, in part, on Revelyst’s relationships with its third-party suppliers, some of whom are also its competitors. If Revelyst is unable to maintain these relationships, Revelyst may not be able to continue to source products at competitive prices that both meet its standards and appeal to Revelyst’s customers. Failure to develop or source and introduce new products that consumers want to buy could decrease Revelyst’s sales, operating margins and market share and could adversely affect its business, financial condition or results of operations.
Even if Revelyst is able to develop or source new products, Revelyst’s efforts to introduce new products may be costly and ineffective. When introducing a new product, Revelyst incurs expenses and expends resources to market, promote and sell the new product. New products that Revelyst introduces into the marketplace may be unsuccessful or may be less successful than Revelyst’s expectations for a variety of reasons, including failure to predict market demand, delays in introduction, unfavorable cost comparisons with alternative products and unfavorable performance. Significant expenses related to new products that prove to be unsuccessful for any reason will adversely affect Revelyst’s results of operations. In addition, inflation and rising product costs may affect Revelyst’s ability to provide products in a cost-effective manner and hinder Revelyst from attracting new customers.
An inability to expand Revelyst’s e-commerce business could reduce its future growth.
Consumers are increasingly shopping online via e-commerce retailers, and Revelyst faces intense pressure to make its products readily and conveniently available via e-commerce services. Revelyst’s success in participating in e-commerce depends on Revelyst’s ability to effectively use its marketing resources to communicate with existing and potential customers. To increase its e-commerce sales, Revelyst may need to dedicate more resources to promotional activity, which could impact Revelyst’s gross margin and increase its marketing expenses. Revelyst continues to enhance its direct-to-consumer e-commerce platforms, but relies to an extent on third-party e-commerce websites to sell Revelyst’s products, which could lead to Revelyst’s e-commerce customers having some control over the pricing of Revelyst’s products. This in turn could harm Revelyst’s relationships with its brick and mortar customers as they may perceive themselves to be at a disadvantage based on the e-commerce pricing of Revelyst’s products. Revelyst may not be able to successfully expand Revelyst’s e-commerce business and respond to shifting consumer traffic patterns and direct-to-consumer buying trends.
In addition, e-commerce and direct-to-consumer operations are subject to numerous risks, including implementing and maintaining appropriate technology to support business strategies; reliance on third-party computer hardware/software and service providers; data breaches; violations of federal, state and international laws, including those relating to online privacy; credit card fraud, telecommunication failures, electronic break-ins and
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similar disruptions; and disruptions of Internet service. Revelyst’s inability to adequately respond to these risks and uncertainties or to successfully maintain and expand Revelyst’s direct-to-consumer business may have an adverse impact on Revelyst’s operating results.
Revelyst plans to continue to expand its brand recognition and product loyalty through social media and Revelyst’s websites. These efforts are intended to yield greater traffic to Revelyst’s websites and increase Revelyst’s direct-to-consumer revenue. By doing so, Revelyst will become, to an extent, a competitor to Revelyst’s customers, reducing their revenue in the process. This could lead to adverse relationships with Revelyst’s online and brick and mortar retail customers, which could have an adverse impact on Revelyst’s operating results.
Revelyst’s business is highly dependent upon its brand recognition and reputation, and the failure to maintain or enhance its brand recognition or reputation would likely have an adverse effect on Revelyst’s business.
Revelyst’s brand recognition and reputation are critical aspects of Revelyst’s business. Revelyst believes that maintaining and enhancing Revelyst’s brands as well as Revelyst’s reputation are critical to retaining existing customers and attracting new customers. Revelyst also believes that the importance of its brand recognition and reputation will continue to increase as competition in the markets in which Revelyst competes continues to develop.
Revelyst’s future growth and profitability will depend in large part upon the effectiveness and efficiency of its advertising, promotion, public relations and marketing programs. These brand promotion activities may not yield increased revenue and the effectiveness of these activities will depend on a number of factors, including Revelyst’s ability to:
determine the appropriate creative message, media mix and markets for advertising, marketing and promotional initiatives and expenditures;
identify the most effective and efficient level of spending in each market, medium and specific media vehicle; and
effectively manage marketing costs, including creative and media expenses, in order to maintain acceptable customer acquisition costs.
Revelyst may implement new marketing and advertising strategies with significantly higher costs than Revelyst’s current channels, which could adversely affect Revelyst’s results of operations. Implementing new marketing and advertising strategies could also increase the risk of devoting significant capital and other resources to endeavors that do not prove to be cost effective. Revelyst also may incur marketing and advertising expenses significantly in advance of the time Revelyst anticipates recognizing revenue associated with such expenses, and Revelyst’s marketing and advertising expenditures may not generate sufficient levels of brand awareness or result in increased revenue. Even if Revelyst’s marketing and advertising expenses result in increased revenue, the increase in revenue might not offset Revelyst’s related marketing and advertising expenditures. If Revelyst is unable to maintain its marketing and advertising channels on cost-effective terms or replace or supplement existing marketing and advertising channels with similarly or more cost-effective channels, Revelyst’s marketing and advertising expenses could increase substantially, Revelyst’s customer base could be adversely affected and Revelyst’s business, financial condition or results of operations could be adversely impacted.
Competitors have imitated and attempted to imitate, and will likely continue to imitate or attempt to imitate, Revelyst’s products and technology, particularly in countries overseas where counterfeiting is more prevalent. If Revelyst is unable to protect or preserve Revelyst’s brand image and proprietary rights, Revelyst’s business may be harmed. As Revelyst increases sales overseas, Revelyst may experience increased counterfeiting of its products.
In addition, certain of Revelyst’s products and brands benefit from endorsements and support from particular outdoor enthusiasts, athletes or other celebrities, and those products and brands may become personally associated with those individuals. As a result, Revelyst’s brands or sales of the endorsed products could be materially and adversely affected if any of those individuals’ images, reputations or popularity were to be negatively impacted.
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Use of social media to disseminate negative commentary and boycotts may adversely impact Revelyst’s business.
There has been a substantial increase in the use of social media platforms, including blogs, social media websites and other forms of Internet-based communications, which allow individuals access to a broad audience of consumers and other interested persons. Negative commentary regarding Revelyst or Revelyst’s brands may be posted on social media platforms at any time and may have an adverse impact on Revelyst’s reputation, business or relationships with third parties, including suppliers, customers, investors and lenders. Consumers value readily available information and often act on such information without further investigation and without regard to its accuracy or context. The harm may be immediate without affording Revelyst an opportunity for redress or correction.
Social media platforms also provide users with access to such a broad audience that collective action, such as boycotts, can be more easily organized. Such actions could have an adverse effect on Revelyst’s business, financial condition, results of operations and/or cash flows.
Revelyst manufactures, sources and sells products that create exposure to potential product liability, warranty liability or personal injury claims and litigation.
Some of Revelyst’s products are used in applications and situations that involve risk of personal injury and death. Revelyst’s products expose Revelyst to potential product liability, warranty liability and personal injury claims and litigation relating to the use or misuse of Revelyst’s products, including allegations of defects in manufacturing, defects in design, deceptive advertising, a failure to warn of dangers inherent in the product or activities associated with the product, negligence and strict liability. If successful, such claims could have a material adverse effect on Revelyst’s business.
Defects in Revelyst’s products could reduce demand for Revelyst’s products and result in a decrease in sales and market acceptance and damage to Revelyst’s reputation.
Complex components and assemblies used in Revelyst’s products may contain undetected defects that are subsequently discovered at any point in the life of the product. In addition, Revelyst obtains many of Revelyst’s products and component parts from third-party suppliers and may not be able to detect defects in such products or component parts until after they are sold. Defects in Revelyst’s products may result in a loss of sales, recall expenses, delay in market acceptance, damage to Revelyst’s reputation and increased warranty costs, which could have a material adverse effect on Revelyst’s business, financial condition or results of operations.
Although Revelyst maintains product liability insurance in amounts that Revelyst believes are reasonable, Revelyst may not be able to maintain such insurance on acceptable terms, if at all, in the future and product liability claims may exceed the amount of Revelyst’s insurance coverage. In addition, Revelyst’s reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about Revelyst’s products.
Revelyst may incur substantial litigation costs to protect its intellectual property, and if Revelyst is unable to protect its intellectual property, Revelyst may lose its competitive advantage. Revelyst may be subject to intellectual property infringement claims, which could cause Revelyst to incur litigation costs and divert management attention from Revelyst’s business.
Revelyst’s future success depends in part upon its ability to protect its intellectual property. Revelyst’s protective measures, including patents, trademarks, copyrights, trade secret protection and internet identity registrations, may prove inadequate to protect its proprietary rights and market advantage. The right to stop others from misusing Revelyst’s trademarks and service marks in commerce depends, to some extent, on Revelyst’s ability to show evidence of enforcement of Revelyst’s rights against such misuse in commerce. Revelyst’s failure to stop the misuse by others of Revelyst’s trademarks and service marks may lead to Revelyst’s loss of trademark and service mark rights, brand loyalty and notoriety among Revelyst’s customers and prospective customers. The scope of any patent to which Revelyst has or may obtain rights may not prevent others from developing and selling competing products. In addition, Revelyst’s patents may be held invalid upon challenge, or others may claim rights in, or ownership of, Revelyst’s patents. Moreover, Revelyst may become subject to litigation with parties that claim,
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among other matters, that Revelyst infringed their patents or other intellectual property rights. The defense and prosecution of patent and other intellectual property claims are both costly and time-consuming and could result in a material adverse effect on Revelyst’s business and financial position.
Also, any intellectual property infringement claims against Revelyst, with or without merit, could be costly and time-consuming to defend and divert Revelyst management’s attention from Revelyst’s business. If Revelyst’s products were found to infringe a third party’s proprietary rights, Revelyst could be forced to enter into costly royalty or licensing agreements in order to be able to continue to sell Revelyst’s products or discontinue use of the protected technology. Such royalty and licensing agreements may not be available on terms acceptable to Revelyst or at all. Rights holders may demand payment for past infringements or force Revelyst to accept costly license terms or discontinue use of protected technology or works of authorship.
Revelyst may become involved in litigation regarding patents and other intellectual property rights. Other companies, including Revelyst’s competitors, may develop intellectual property that is similar or superior to Revelyst’s intellectual property, may duplicate Revelyst’s intellectual property or design around Revelyst’s patents or may have or obtain patents or other proprietary rights that would prevent, limit or interfere with Revelyst’s ability to make, use or sell its products. Effective intellectual property protection may be unavailable or limited in some foreign countries in which Revelyst sells products or from which competing products may be sold.
Unauthorized parties may attempt to copy or otherwise use aspects of Revelyst’s intellectual property and products that Revelyst regards as proprietary. Revelyst’s means of protecting its proprietary rights in the U.S. or abroad may prove to be inadequate, and competitors may be able to develop similar intellectual property independently. If Revelyst’s intellectual property protection is insufficient to protect its intellectual property rights, Revelyst could face increased competition in the markets for its products.
Should any of Revelyst’s competitors file patent applications or obtain patents that claim inventions also claimed by Revelyst, Revelyst may choose to participate in an interference proceeding to determine the right to a patent for these inventions because Revelyst’s business could be harmed if Revelyst fails to enforce and protect Revelyst’s intellectual property rights. Even if the outcome is favorable, an interference proceeding could result in substantial costs to Revelyst and disrupt Revelyst’s business.
In the future, Revelyst also may need to file lawsuits to enforce Revelyst’s intellectual property rights, to protect Revelyst’s trade secrets or to determine the validity and scope of the proprietary rights of others. Any such litigation, whether successful or unsuccessful, could result in substantial costs and diversion of resources, which could have a material adverse effect on Revelyst’s business, financial condition or results of operations.
Revelyst is subject to extensive regulation that imposes significant compliance costs on Revelyst and that could result in fines, penalties, business disruptions or other costs and liabilities.
Like other global manufacturers and distributors of consumer products, Revelyst is required to comply with a wide variety of federal, state, local and international laws, rules and regulations, including those related to consumer products and consumer protection, advertising and marketing, labor and employment, data protection and privacy, intellectual property, workplace safety, the environment, the import and export of products and tax. See the section entitled “Information about the Revelyst Business—Regulatory Matters” beginning on page 182 for a description of the various laws and regulations to which Revelyst’s business is subject. Revelyst’s failure to comply with applicable federal, state, local and international laws, rules and regulations may result in Revelyst being subject to claims, lawsuits, fines, business disruptions and adverse publicity that could have a material adverse effect on Revelyst’s business, results of operations or financial condition. These laws, rules and regulations currently impose significant compliance requirements on Revelyst’s business, and more restrictive laws, rules and regulations may be adopted in the future.
Increased focus and expectations on climate change and other Environmental, Social and Governance (“ESG”) matters may impose additional costs on Revelyst or could have a material adverse effect on Revelyst’s business, financial condition and results of operations and damage Revelyst’s reputation.
Increased focus and expectations on ESG are emerging trends with governmental and non-governmental organizations, stockholders, retail customers, end consumers, communities and other stakeholders. These trends
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have led to, among other things, increased public and private social accountability reporting requirements relating to labor practices, climate change, human trafficking, diversity and inclusion, employee well-being and other ESG matters and greater demands on Revelyst’s packaging and products. The increased focus on ESG matters may also lead to increased regulation and customer, stockholder and consumer demands that may hinder access to or increase the cost of capital as investors reallocate capital or decide not to commit capital as a result of their assessment of companies’ ESG practices or reporting, or could require Revelyst to incur additional costs or make changes to Revelyst’s operations to comply with new regulations or address these demands. Revelyst expects that these trends will continue. If Revelyst is unable to adequately respond to, or Revelyst is not perceived as adequately responding to, existing or new requirements or demands, customers and consumers may choose to purchase products from another company or a competitor. Increased requirements and costs to comply with these requirements, such as climate change regulations and international accords, may also cause disruptions in or higher costs associated with manufacturing or distributing Revelyst’s products. ESG matters are currently reported in line with a variety of different reporting frameworks and by a number of sustainability ratings agencies, and these frameworks and ratings providers may not be the same as those evaluated by Revelyst’s stakeholders, may emphasize different aspects of ESG practices and performance or may not accurately reflect Revelyst’s ESG performance in certain respects. Any real or perceived failure to achieve Revelyst’s ESG goals or a perception of Revelyst’s failure to act responsibly or to effectively respond to new, or changes in, legal or regulatory requirements relating to ESG matters could adversely affect Revelyst’s business, financial condition, results of operations and reputation.
Failure to comply with the U.S. Foreign Corrupt Practices Act or other applicable anti-corruption legislation, as well as export controls and trade sanctions, could result in fines or criminal penalties.
The international nature of Revelyst’s business exposes Revelyst to trade controls and other restrictions imposed by the U.S. and other governments. The U.S. Departments of Justice, Commerce and Treasury and other agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against companies for violations of the U.S. Foreign Corrupt Practices Act (the “FCPA”), export controls, economic sanctions, anti-boycott provisions and other federal statutes and regulations and, increasingly, similar or more restrictive foreign laws, rules and regulations, which may also apply to Revelyst. In recent years, U.S. and foreign governments have increased their oversight and enforcement activities with respect to these laws and Revelyst expects the relevant agencies to continue to increase their enforcement efforts.
In foreign countries in which Revelyst has operations, a risk exists that Revelyst’s associates, contractors or agents could, in contravention of Revelyst’s policies, engage in business practices prohibited by U.S. laws and regulations applicable to Revelyst, such as the FCPA, or the laws and regulations of other countries, such as the UK Bribery Act. Prior to the Closing, Revelyst will adopt a corporate policy that will prohibit such business practices. Nevertheless, Revelyst remains subject to the risk that one or more of Revelyst’s associates, contractors or agents, including those based in or from countries where practices that violate such U.S. laws and regulations or the laws and regulations of other countries may be customary, will engage in business practices that are prohibited by Revelyst’s policies, circumvent Revelyst’s compliance programs and, by doing so, violate such laws and regulations. Any such violations, even if prohibited by Revelyst’s internal policies, could adversely affect Revelyst’s business or financial performance and Revelyst’s reputation.
By virtue of these laws and regulations, Revelyst may be obliged to limit its business activities, incur costs for compliance programs or be subject to enforcement actions or penalties for noncompliance. A violation of these laws, sanctions or regulations could result in restrictions on Revelyst’s exports, civil and criminal fines or penalties and could adversely impact Revelyst’s business, financial condition or results of operations.
If Revelyst’s efforts to protect the security of personal information about Revelyst’s customers and consumers are unsuccessful and unauthorized access to that personal information is obtained, or Revelyst experiences a significant disruption in Revelyst’s computer systems or a cybersecurity breach, such as the ransomware attack experienced by Fox Racing in April 2021 prior to being acquired by Revelyst, Revelyst could experience an adverse effect on its operations, Revelyst could be subject to costly government enforcement action and private litigation and Revelyst’s reputation could suffer.
Revelyst’s operations, especially its retail operations, involve the storage and transmission of its customers’ and consumers’ proprietary information, such as credit card and bank account numbers, and security breaches could
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expose Revelyst to a risk of loss of this information, government enforcement action and litigation and possible liability. Revelyst’s payment services may be susceptible to credit card and other payment fraud schemes, including unauthorized use of credit cards, debit cards or bank account information, identity theft or merchant fraud.
If Revelyst’s security measures are breached as a result of third-party action, employee error, malfeasance or otherwise, and as a result, someone obtains unauthorized access to Revelyst’s customers’ and consumers’ data, Revelyst’s reputation may be damaged, Revelyst’s business may suffer, and Revelyst could incur significant liability. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target, Revelyst may be unable to anticipate these techniques or implement adequate preventative measures. If an actual or perceived breach of Revelyst’s security occurs, the public perception of the effectiveness of Revelyst’s security measures could be harmed and Revelyst could lose customers and consumers, which could adversely affect Revelyst’s business. Prior to being acquired by Revelyst, Fox Racing experienced a ransomware attack in April 2021. The attack impacted Fox Racing’s backup systems, and Fox Racing incurred significant expense to restore access to its systems. Following the attack, Fox Racing notified the eleven individuals (located in the United Kingdom, Spain and Canada) who were affected along with regulators in the applicable jurisdictions. Although Fox Racing has taken steps to enhance its security systems in response to this incident, Revelyst cannot assure you that such steps will be sufficient to prevent similar attacks in the future.
Revelyst also relies extensively on Revelyst’s computer systems to manage Revelyst’s ordering, pricing, inventory replenishment and other processes. Revelyst’s systems could be subject to damage or interruption from various sources, including power outages, computer and telecommunications failures, computer viruses, cyber security breaches, vandalism, severe weather conditions, catastrophic events and human error, and Revelyst’s disaster recovery planning cannot account for all eventualities. If Revelyst’s systems are damaged, fail to function properly or otherwise become unavailable, Revelyst may incur substantial costs to repair or replace them, and Revelyst may experience loss of critical data and interruptions or delays in Revelyst’s ability to perform critical functions, which could adversely affect Revelyst’s business, financial condition or results of operations.
Failure to comply with data privacy and security laws and regulations could adversely affect Revelyst’s operating results and business.
A growing number of federal, state and international data privacy and security laws and regulations have been enacted that govern the collection, use, disclosure, transfer, storage, disposal and protection of sensitive personal information, such as social security numbers, financial information and other personal information. For example, several U.S. territories and all 50 states now have data breach laws that require timely notification to individual victims, and at times regulators, if a company has experienced the unauthorized access or acquisition of sensitive personal data. Other state laws include the California Consumer Privacy Act (the “CCPA”), which gives California residents certain privacy rights in the collection and disclosure of their personal information and requires businesses to make certain disclosures and take certain other acts in furtherance of those rights. Additionally, the California Privacy Rights Act (the “CPRA”), which became effective January 1, 2023, revised and significantly expanded the scope of the CCPA. The CPRA created a new California data protection agency authorized to implement and enforce the CCPA and the CPRA, which could result in increased enforcement. Other states have considered and/or enacted similar privacy laws. For example, Virginia’s privacy laws went into effect on January 1, 2023, Colorado’s and Connecticut’s privacy laws went into effect on July 1, 2023, and Utah’s privacy law went into effect December 31, 2023. Revelyst will continue to monitor and assess the impact of these state laws, which may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class action litigation and carry significant potential liability for Revelyst’s business.
Outside of the U.S., data protection laws, including the E.U. General Data Protection Regulation (the “GDPR”), which also forms part of the law of England and Wales, Scotland and Northern Ireland by virtue of section 3 of the European Union (Withdrawal) Act 2018 and as amended by the Data Protection, Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations 2019 (SI 2019/419) (the “UK GDPR”), also apply to some of Revelyst’s operations. Legal requirements in many countries relating to the collection, storage, processing and transfer of personal data continue to evolve. The GDPR imposes, among other things, data protection requirements that include strict obligations and restrictions on the ability to collect, analyze and transfer EU personal data, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain
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circumstances and possible substantial fines for any violations. Other governmental authorities around the world are considering and, in some cases, have enacted, similar privacy and data security laws. Failure to comply with federal, state and international data protection laws and regulations could result in government enforcement actions (which could include substantial civil and/or criminal penalties), private litigation and adverse publicity and could negatively affect Revelyst’s operating results and business.
In addition to the risk that Revelyst fails to comply with one or more of these laws and regulations, Revelyst is likely to incur substantial costs monitoring and implementing compliance with the array of privacy and security legal regimes to which Revelyst is subject. Moreover, many of the laws and regulations in this area are relatively new and their interpretations are uncertain and subject to change. Combined with the frequency with which new privacy and security laws are introduced globally, this means that Revelyst may be required to make changes to Revelyst’s operations or practices in an effort to comply with them. Such changes may increase Revelyst’s costs and reduce Revelyst’s revenue. Revelyst may also face inconsistent legal requirements across the various jurisdictions in which Revelyst operates, further raising both costs of compliance and the likelihood that Revelyst will fail to satisfy all of Revelyst’s legal requirements.
Changes in U.S. and global trade policies, including new and potential tariffs on goods Revelyst imports or on products Revelyst exports to other countries, could increase Revelyst’s cost of goods or limit Revelyst’s access to export markets.
In recent years, protectionist trade policies have been increasing around the world, including in the U.S. It is unclear what additional tariffs, duties, border taxes or other similar assessments on imports might be implemented in the future and what effects these changes may have on retail markets or Revelyst’s operating performance. Additional protectionist trade legislation in either the U.S. or foreign countries, including changes in the current tariff structures, export or import compliance laws or other trade policies, could reduce Revelyst’s ability to sell Revelyst’s products in foreign markets, the ability of foreign customers to purchase Revelyst’s products and Revelyst’s ability to import components, parts and products from foreign suppliers. In particular, increases in tariffs on goods imported into the U.S. could increase the cost to Revelyst of such merchandise (whether imported directly or indirectly) and cause increases in the prices at which Revelyst sells such merchandise to its customers, which could materially adversely affect the financial performance of Revelyst’s business.
The global economy has been negatively impacted by the war in Ukraine. Furthermore, governments in the U.S., the United Kingdom and the European Union have imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia. Although Revelyst has no operations in Russia or Ukraine, Revelyst may experience shortages in materials and increased costs for transportation, energy and raw materials due in part to the negative impact of the war in Ukraine on the global economy. Further escalation of geopolitical tensions related to war, including increased trade barriers or restrictions on global trade, could result in, among other things, cyberattacks, supply disruptions, lower consumer demand and changes to foreign exchange rates and financial markets, any of which may adversely affect Revelyst’s business and supply chain. In addition, the effects of the ongoing conflict could heighten many of the other risks to Revelyst’s business described in this proxy statement/prospectus.
Revelyst’s results of operations could be impacted by unanticipated changes in tax provisions or exposure to additional income tax liabilities.
Revelyst’s business operates in many locations under government jurisdictions that impose income taxes. Changes in domestic or foreign income tax laws and regulations, or their interpretation, could result in higher or lower income tax rates assessed or changes in the taxability of certain revenues or the allowance of deduction of certain expenses, thereby affecting Revelyst’s income tax expense and profitability. In addition, audits by income tax authorities could result in unanticipated increases in Revelyst’s income tax expense.
In particular, Revelyst is affected by the impact of changes to tax laws or related authoritative interpretations. A change in authoritative interpretation to the U.S. tax code, related tax accounting guidance and regulatory guidance as well as state tax implications or other legislation changes may cause variability in Revelyst’s future tax rate.
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Fluctuations in foreign currency exchange rates may adversely affect Revelyst’s financial results.
During the fiscal year ended March 31, 2023, approximately 29% of Revelyst’s revenue was generated from sales outside the United States. Revenues from foreign operations (and the related expense) are often transacted in foreign currencies or valued based on a currency other than U.S. dollars. For the fiscal year ended March 31, 2023, less than 10% of Revelyst’s total revenue was denominated in a foreign currency. For the purposes of financial reporting, this revenue is translated into U.S. dollars. Resulting gains and losses from foreign currency fluctuations are therefore included in the Revelyst combined financial statements. As a result, when the U.S. dollar strengthens against certain foreign currencies, including the Euro, the British pound, the Chinese renminbi (yuan), the Canadian dollar and other major currencies, Revelyst’s reportable revenue in U.S. dollars generated from sales made in foreign currencies may decrease substantially. As a result, Revelyst is exposed to foreign currency exchange rate fluctuations, which could have an adverse effect on Revelyst’s financial condition, results of operations and cash flows.
Revelyst may need to raise capital to fund Revelyst’s ongoing working capital, capital expenditures and other financing requirements, and Revelyst cannot be sure that financing will be available on attractive terms or at all.
In addition to raising capital to finance the acquisition component of Revelyst’s growth strategy, Revelyst will need to fund its ongoing working capital, capital expenditures and other financing requirements through cash flows from operations and new sources of financing. Revelyst’s ability to obtain future financing will depend on, among other things, Revelyst’s financial condition and results of operations as well as on the condition of the capital markets or other credit markets at the time Revelyst seeks financing. Increased volatility and disruptions in the financial markets, including as a result of natural disasters and public health crises or other significant catastrophic events, such as a pandemic, epidemic or infectious disease outbreak, or geopolitical events, such as the war in Ukraine and the Israel-Gaza conflict, could make it more difficult and more expensive for Revelyst to obtain financing. Revelyst cannot assure you that it will have access to the capital markets or other credit markets on terms Revelyst finds acceptable or at all.
Variable rate indebtedness would subject Revelyst to interest rate risk, which could cause Revelyst’s debt service obligations to increase significantly.
In connection with the Transaction, Revelyst expects to enter into a revolving credit facility with variable rates of interest that will expose Revelyst to interest rate risks. If interest rates increase, Revelyst’s debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remains the same, and Revelyst’s net income and cash flows will correspondingly decrease. In addition, Revelyst will be exposed to the risk of rising interest rates to the extent that Revelyst funds operations with other short-term or variable-rate borrowings. Even if Revelyst enters into interest rate swaps in the future in order to reduce future interest rate volatility, Revelyst may not fully mitigate its future interest rate risk. As a result, Revelyst’s financial condition could be materially negatively affected.
If Revelyst’s estimates or judgments relating to its critical accounting policies prove to be incorrect or change significantly, Revelyst’s results of operations could be harmed.
Preparing Revelyst’s financial statements in conformity with GAAP requires Revelyst management to make estimates and assumptions that affect the amounts reported in the Revelyst combined financial statements and accompanying notes. Revelyst bases its estimates on historical experience and on various other assumptions that Revelyst believes to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of sales and expenses that are not readily apparent from other sources. Revelyst’s results of operations may be harmed if Revelyst’s assumptions change or if actual circumstances differ from those in Revelyst’s assumptions, which could cause Revelyst’s results of operations to fall below the expectations of securities analysts and investors and could result in a decline in Revelyst’s stock price.
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Risks Relating to Revelyst Common Stock
No market for Revelyst Common Stock currently exists, and an active trading market may not develop or be sustained after the Transaction. Following the Transaction, Revelyst’s stock price may fluctuate significantly.
There is currently no public market for Revelyst Common Stock. Revelyst intends to apply to list Revelyst Common Stock on the NYSE. Following the Closing, an active trading market for Revelyst Common Stock may not develop or may not be sustained in the future. The lack of an active market may make it more difficult for Revelyst stockholders to sell their shares of Revelyst Common Stock and could lead to Revelyst’s stock price being depressed or volatile.
Revelyst cannot predict the prices at which Revelyst Common Stock may trade after the Closing. The market price of Revelyst Common Stock may fluctuate widely, depending on many factors, some of which may be beyond Revelyst’s control, including:
actual or anticipated fluctuations in Revelyst’s business, financial condition and results of operations due to factors related to Revelyst’s business;
the loss of business from one or more significant customers;
competition in the outdoor recreation industry and Revelyst’s ability to compete successfully;
success or failure of Revelyst’s business strategies;
Revelyst’s ability to retain and recruit qualified personnel;
Revelyst’s quarterly or annual earnings, or those of other companies in Revelyst’s industry;
Revelyst’s level of indebtedness, Revelyst’s ability to make payments on or service Revelyst’s indebtedness and Revelyst’s ability to obtain financing as needed;
announcements by Revelyst or its competitors of significant acquisitions or dispositions;
changes in accounting standards, policies, guidance, interpretations or principles;
the failure of securities analysts to cover Revelyst Common Stock after the Closing;
changes in earnings estimates by securities analysts or Revelyst’s ability to meet those estimates;
the operating and stock price performance of other comparable companies;
investor perception of Revelyst and the outdoor recreation industry;
overall market fluctuations and geopolitical conditions;
results from any material litigation or government investigation;
changes in laws and regulations (including tax laws and regulations) affecting Revelyst’s business; and
general economic conditions, credit and capital market conditions and other external factors.
Furthermore, Revelyst’s business profile and market capitalization may not fit the investment objectives of former Vista Outdoor stockholders and, as a result, these former Vista Outdoor stockholders may sell their shares of Revelyst Common Stock after the Closing. See “—Substantial sales of Revelyst Common Stock may occur following the Closing, which could cause Revelyst’s stock price to decline” beginning on page 61. Low trading volume for Revelyst Common Stock, which may occur if an active trading market does not develop, among other reasons, would amplify the effect of the above factors on Revelyst’s stock price volatility.
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Substantial sales of Revelyst Common Stock may occur following the Closing, which could cause Revelyst’s stock price to decline.
Vista Outdoor stockholders receiving shares of Revelyst Common Stock in the Merger are generally free to sell those shares immediately in the public market. It is possible that some Vista Outdoor stockholders, including some of Vista Outdoor’s larger stockholders, will sell their shares of Revelyst Common Stock received in the Merger, particularly if, for reasons such as Revelyst’s business profile, Revelyst does not fit their investment objectives, or, in the case of index funds, if Revelyst is not a participant in the index in which they are investing. The sales of significant amounts of Revelyst Common Stock or the perception in the market that this will occur may decrease the market price of Revelyst Common Stock.
Revelyst does not anticipate paying any regular dividends on its common stock for the foreseeable future, and as a result, your only opportunity to achieve a return on your investment is if the price of Revelyst Common Stock appreciates.
Revelyst does not anticipate paying any regular dividends on its common stock for the foreseeable future. Revelyst intends to retain future earnings for use in the operation of its business and to fund future growth, including through acquisitions. Following the Closing, the timing, declaration, amount and payment of future dividends, if any, to stockholders will fall within the discretion of the Revelyst Board. The Revelyst Board’s decisions regarding the payment of future dividends, if any, will depend on many factors, including Revelyst’s financial condition, earnings, capital requirements of Revelyst’s operating subsidiaries, covenants associated with any then-existing indebtedness, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by the Revelyst Board. As a result, capital appreciation, if any, of Revelyst Common Stock will be your sole source of potential gain for the foreseeable future.
Provisions of the Revelyst Charter, the Revelyst Bylaws and Delaware law may prevent or delay an acquisition of Revelyst, which could decrease the trading price of Revelyst Common Stock.
Several provisions of the Revelyst Charter, the Revelyst Bylaws and Delaware law may discourage, delay or prevent a merger or acquisition that Revelyst stockholders may consider favorable. These include provisions that:
until the fourth annual meeting of Revelyst stockholders following the Closing Date, classify Revelyst’s directors into three classes with staggered terms;
allow the Revelyst Board to authorize for issuance, without stockholder approval, preferred stock, the rights of which will be determined at the discretion of the Revelyst Board and, if issued, could operate as a “poison pill” to dilute the stock ownership of a potential hostile acquirer to prevent an acquisition that the Revelyst Board does not approve;
prohibit Revelyst stockholders from taking action by written consent and require that stockholder action must take place at a duly called annual or special meeting of Revelyst stockholders;
establish how stockholders may present proposals or nominate directors for election at meetings of Revelyst stockholders;
grant exclusive privilege (subject to certain limited exceptions) to Revelyst’s directors, and not Revelyst stockholders, to fill vacancies on the Revelyst Board;
provide that only the Revelyst Board, the Chair of the Revelyst Board, Revelyst’s Chief Executive Officer or, in the absence of Revelyst’s Chief Executive Officer, Revelyst’s President are entitled to call a special meeting of Revelyst stockholders; and
limit Revelyst’s ability to enter into business combination transactions with certain stockholders.
These and other provisions of the Revelyst Charter, the Revelyst Bylaws and Delaware law may discourage, delay or prevent certain types of transactions involving an actual or a threatened acquisition or change in control of Revelyst, including unsolicited takeover attempts, even though the transaction may offer Revelyst stockholders the
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opportunity to sell their shares of Revelyst Common Stock at a price above the prevailing market price. For more information, see the section entitled “Description of Revelyst Capital Stock—Certain Provisions of Delaware Law, Revelyst’s Amended and Restated Certificate of Incorporation and Revelyst’s Amended and Restated Bylaws” beginning on page 259.
The Revelyst Charter will designate the Delaware Court of Chancery as the exclusive forum for certain types of actions and proceedings that may be initiated by Revelyst stockholders, and the federal district courts of the United States as the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act, which could limit Revelyst stockholders’ ability to choose the judicial forum for disputes with Revelyst or Revelyst’s directors, officers or employees.
The Revelyst Charter will provide that, unless Revelyst consents in writing to the selection of an alternative forum, the Delaware Court of Chancery shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on Revelyst’s behalf (other than actions arising under the Securities Act or the Exchange Act), (ii) any action asserting a claim of breach of a fiduciary duty owed by any of Revelyst’s directors, officers or other employees to Revelyst or Revelyst stockholders, (iii) any action asserting a claim against Revelyst arising pursuant to any provision of the DGCL, the Revelyst Charter or the Revelyst Bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine, in each case except for any claim where the Delaware Court of Chancery does not have jurisdiction over indispensable parties named as defendants, any claim that is subject to the exclusive jurisdiction of another court or forum and any claim for which the Delaware Court of Chancery does not have subject matter jurisdiction.
Section 22 of the Sec