WESTPORT, Conn., Aug. 31, 2016 /PRNewswire/ -- Compass
Diversified Holdings (NYSE: CODI) ("CODI" or the "Company"), an
owner of leading middle market businesses, announced the closing of
the acquisition of 5.11 Tactical® ("5.11"), pursuant to
an agreement entered into on July 29,
2016.
The acquisition was completed for a purchase price of
$400 million (excluding working
capital and other customary adjustments) and funded through a draw
on the Company's revolving credit facility as well as $250 million in additional term loan debt issued
under the Company's existing credit facility in connection with the
closing of the 5.11 acquisition. Acquisition related costs
were $1.9 million. As part of
the transaction, CODI acquired a substantial tax asset, the
positive effect of which will be meaningful for CODI's annual cash
flow. The acquisition of 5.11 is expected to provide thirty to
thirty-five cents per share of cash
flow accretion to CODI on an annualized basis.
CODI's initial equity ownership in 5.11 as a result of this
transaction is approximately 97.5%. 5.11's management team invested
alongside CODI and own the remaining 2.5%.
5.11 is a leading designer and marketer of purpose-built
tactical apparel and gear serving a wide range of global customers
including law enforcement, military special operations and
firefighters, as well as outdoor enthusiasts. 5.11 is headquartered
in Irvine, CA and Modesto, CA, and operates international sales
offices in Sweden, Mexico, Australia, China and UAE.
Additional information on the acquisition will be available on
the Company's current report on Form 8-K that will be filed with
the Securities and Exchange Commission.
About Compass Diversified Holdings ("CODI")
CODI owns
and manages a diverse family of established North American middle
market businesses. Each of its current subsidiaries is a leader in
its niche market.
CODI maintains controlling ownership interests in each of its
subsidiaries in order to maximize its ability to impact long term
cash flow generation and value. The Company provides both debt and
equity capital for its subsidiaries, contributing to their
financial and operating flexibility. CODI utilizes the cash flows
generated by its subsidiaries to invest in the long-term growth of
the Company and to make cash distributions to its shareholders.
Our nine majority-owned subsidiaries are engaged in the
following lines of business:
- The design and marketing of purpose-built tactical apparel and
gear serving a wide range of global customers (5.11);
- The manufacture of quick-turn, small-run and production rigid
printed circuit boards (Advanced Circuits);
- The design and manufacture of medical therapeutic support
surfaces and other wound treatment devices (Anodyne Medical
Device, also doing business and known as Tridien
Medical);
- The manufacture of engineered magnetic solutions for a wide
range of specialty applications and end-markets (Arnold Magnetic
Technologies);
- Environmental services for a variety of contaminated materials
including soils, dredged material, hazardous waste and drill
cuttings (Clean Earth);
- The design and marketing of wearable baby carriers, strollers
and related products (Ergobaby);
- The design and manufacture of premium home and gun safes
(Liberty Safe);
- The manufacture and marketing of branded, hemp-based food
products (Manitoba Harvest); and
- The manufacture and marketing of portable food warming fuels
and creative ambience solutions for the hospitality and consumer
markets (Sterno Products).
In addition, we own approximately 23% of the common stock of Fox
Factory Holding Corp. ("FOX", Nasdaq: FOXF), a former
subsidiary business that completed its initial public offering in
August 2013. FOX designs and manufactures
high-performance suspension products primarily for mountain bikes,
side-by-side vehicles, on-road and off-road vehicles and trucks,
all-terrain vehicles, snowmobiles, specialty vehicles and
applications, and motorcycles.
This press release may contain certain forward-looking
statements, including statements with regard to the future
performance of CODI. Words such as "believes," "expects,"
"projects," and "future" or similar expressions, are intended to
identify forward-looking statements. These forward-looking
statements are subject to the inherent uncertainties in predicting
future results and conditions. Certain factors could cause actual
results to differ materially from those projected in these
forward-looking statements, and some of these factors are
enumerated in the risk factor discussion in the Form 10-K filed by
CODI with the SEC for the year ended December 31, 2015 and other filings with the SEC.
Except as required by law, CODI undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
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SOURCE Compass Diversified Holdings