CSG Sends Letter to Senator J.D. Vance Addressing His Concerns Regarding Planned Acquisition of Vista Outdoor’s Sporting Products Business, The Kinetic Group

The Czechoslovak Group (“CSG”) owner and CEO Michal Strnad today sent an open letter to U.S. Senator J.D. Vance (R-OH) addressing concerns he raised in a letter to U.S. Treasury Secretary Janet Yellen in connection to CSG’s proposed acquisition of Vista Outdoor Inc.’s (NYSE: VSTO) (“Vista Outdoor”) Sporting Products business – recently renamed The Kinetic Group.

The full text of the letter can be found below:

April 16, 2024

Senator J. D. Vance

288 Russell Senate Office Building

Washington, DC 20510

Dear Senator Vance,

In January, you sent a letter to Treasury Secretary Janet Yellen expressing your concerns about the proposed sale of The Kinetic Group, formerly Vista Outdoor’s Sporting Products business, to our company, The Czechoslovak Group (“CSG”). In your letter, you claimed that CSG is a company with a long record of wrongdoing and well-documented connections to American adversaries. Specifically, you mentioned ties to Putin's regime and violations of international arms embargoes. Although we were shocked by these false accusations, we waited to respond until we published our financial results for 2023, and with them a transparent profile of our group's business.

Senator, with all due respect, your assessment of us was profoundly mistaken. CSG is one of the most important private supporters of the Ukrainian military effort, a country to which we have supplied much-needed weapon systems dating back to 2018, well before the outbreak of open Russian aggression. Since the Russian army's attack on Ukraine, we have supplied the Ukrainian Army – with the help of the government of the Czech Republic and other NATO countries, including the U.S. – over a hundred pieces of heavy equipment and, most importantly, hundreds of thousands of pieces of artillery ammunition, of which we are one of the most important European manufacturers.¹

CSG Group companies are also suppliers to the U.S. military and have a significant history of cooperation with major American defense industry corporations. An example is General Dynamics, from whose European company General Dynamics European Land Systems we obtained a license for the production of Pandur wheeled armored personnel carriers and also purchased the FMG ammunition factory in Spain. Another example is Raytheon, for which we fulfilled a contract to train Afghan National Army pilots using American UH-60 Black Hawk helicopters. Last but not least, we would like to point out that several of our companies hold NATO security clearance level SECRET.

Considering the above, any speculation about the CSG's connection to the Putin regime should be considered nonsense. We nevertheless explicitly note that CSG has never had any ties to Putin's regime and there is no reason why we would have such ties, given that we have never supplied any defense products to Russia. Past export of our civilian products – namely trucks for the mining industry – was negligible, and after the outbreak of Russian aggression against Ukraine, it was unilaterally terminated by us. CSG has also never violated any arms embargo and has never been investigated for doing so, let alone sanctioned.

We understand that the sale of major producers of small caliber ammunition to a foreign company, even if it is a company from a NATO member state that is a close ally of the U.S., attracts well-deserved attention. In today's global world, however, it is not important which allied country the buying company is based, but what its track record is and what value it can bring to the American ammunition manufacturers associated in The Kinetic Group.

We believe that from the point of view of American customers, whether in the civilian market or in the defense and law enforcement segment, the ideal owner is one who does not hold companies for short-term profits, who is not in the grip of the stock market, and who is an expert in the field. We are familiar with the small caliber ammunition market thanks to the acquisition of a majority stake in Fiocchi, a well-known producer of small caliber ammunition worldwide – which also had to be approved by CFIUS – because this company also operates two production sites in the U.S. We are an industrial group that holds the companies it acquires for the long term and invests in them.

We call to your attention a press release on our 2023 financial results with a detailed profile of our business.² But we know the most convincing argument is one you can experience yourself. That's why we invite you to visit CSG member companies in the U.S. and Europe to experience first-hand who we really are.

Yours sincerely,

Michal Strnad, CEO and owner

CSG

About Czechoslovak Group

Czechoslovak Group (CSG) is an international industrial technology holding company owned by Michal Strnad. CSG supports the development of Czech and Slovak companies engaged in defense and civil industrial production and trade. More than 10,000 people are employed by CSG companies and affiliates. In 2023, the holding’s preliminary 2023 consolidated revenues reached $1.85 billion. CSG operates across four strategic business segments covering aerospace, ammunition, defense, mobility and business projects.

¹ https://vlada.gov.cz/scripts/detail.php?id=203549&tmplid=51

² https://czechoslovakgroup.com/en/news/annual-results-2023

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