Vista Outdoor Inc. has struck a deal to sell its sporting products business — including Federal Ammunition — to a European company for $1.9 billion.

The buyer is Prague-based Czechoslovak Group (CSG), an industrial technology holding company which operates five strategic business segments and more than 100 companies.

"This is an important strategic step for our company in creating value through separating our outdoor products and sporting products segments," said Gary McArthur, interim CEO of Vista Outdoor, in a statement.

The U.S. base for the business will remain in Anoka.

Vista's stock dropped, closing 23% down for the day.

The biggest issue for investors is a drop in financial guidance for the unit for fiscal year 2024. Vista is now projecting sales in the range of $2.7 billion to $2.8 billion; in July, the forecast was $2.85 billion to $2.95 billion.

"According to management, the Outdoor Products segment has been seeing a slower recovery than they originally anticipated, and they now do not expect any improvement in channel purchasing behavior until [fiscal year 2025]," wrote Eric Wold, an analyst with California-based B. Riley Securities, in his research note.

In the long term Wold remains optimistic and reiterated his buy rating for the stock.

The plan for the sporting products segment, which will include ammunition brands such as Federal, remains the same. Jason Vanderbrink, currently head of the division, will become CEO of the newly named Kinetics company. McArthur will become chairman.

Vista announced plans to split its ammunition and outdoor products in May 2022.

The outdoor products group — expected to be headquartered in Montana — would be renamed Revelyst Inc. Eric Nyman, former president of toy company Hasbro, will be CEO of the new company.

The transaction is expected to close in 2024.

For the company's second fiscal quarter, which ended Sept. 25, sales of sporting products are expected to be in the range of $347 million to $352 million, down from $432 million in the same period a year ago. Outdoor products sales are expected to be in the range of $325 million to $330 million, down from $349 million.

Sales in both categories are lower than earlier estimates due to a "challenging economic environment for consumers" and decreased buying from customers, the company said.

Vista plans to use the proceeds to pay off all its outstanding debt and provide approximately $750 million in cash to shareholders. A spokesperson did not provide additional information about how the cash to shareholders would be structured.

At the end of its first fiscal quarter on June 25 company filings indicated that Vista had $886 million in long-term debt.