Compass Diversified Holdings Closes Sale of Manitoba Harvest to Tilray
February 28 2019 - 5:45PM
Compass Diversified Holdings (NYSE: CODI) (“CODI” or the
“Company”), an owner of leading middle market businesses, announced
today that it has completed the sale of its majority owned
subsidiary, FHF Holdings Ltd. (“Manitoba Harvest”), to Tilray Inc.
(“Tilray”) (NASDAQ: TLRY), pursuant to an agreement it entered into
on February 19, 2019.
The sale price of Manitoba Harvest was based on
an aggregate total enterprise value of up to C$419 million plus
estimated cash and working capital adjustments subject to customary
post-closing true-ups. Manitoba Harvest shareholders, including
CODI, received C$277.5 million at closing, comprised of C$150
million in cash and C$127.5 million in Tilray Shares. After the
allocation of the sales price to non-controlling equity holders and
the payment of transaction expenses, CODI received approximately
C$234 million at closing comprised of cash and Tilray shares. This
amount is in respect of the Company's outstanding loans to Manitoba
Harvest (including accrued interest) and its equity interests in
Manitoba Harvest, which was acquired by CODI on July 13, 2015. Six
months after closing, Manitoba Harvest shareholders, including
CODI, will receive C$92.5 million, comprised of C$50 million in
cash and C$42.5 million in Tilray Shares. Manitoba Harvest
shareholders, including CODI, will receive an additional C$49
million in Tilray Shares upon Manitoba Harvest achieving certain
performance milestones in 2019, such amount to be reduced to the
extent that some or all of the milestones are not achieved.
CODI expects to realize a gain on the sale of
between $100 million and $120 million in USD, and intends to use
the net proceeds to repay outstanding debt under the Company's
revolving credit facility.
Stikeman Elliott LLP acted as legal counsel to
sellers. Jefferies LLC acted as financial advisor to CODI in
connection with the transaction.
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 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
custom molded protective foam solutions and OE components
(Foam Fabricators);
- The design and manufacture of
premium home and gun safes (Liberty Safe);
- The manufacture and marketing of
portable food warming fuels for the hospitality and consumer
markets, flameless candles and house and garden lighting for the
home decor market, and wickless candle products used for home decor
and fragrance systems (The Sterno Group); and
- The design, manufacture and
marketing of airguns, archery products, optics and related
accessories (Velocity Outdoor).
About TilrayTilray is a
global pioneer in the research, cultivation, production and
distribution of cannabis and cannabinoids currently serving tens of
thousands of patients and consumers in twelve countries spanning
five continents.
About Manitoba Harvest
Headquartered in Winnipeg, Manitoba, and founded in 1998, Manitoba
Harvest is a pioneer and global leader in branded, hemp-based
foods. The company is the world’s largest vertically-integrated
hemp food manufacturer and is strategically located near its supply
base in Canada. Manitoba Harvest’s 100% all-natural product lineup
includes hemp hearts, hemp protein powder and hemp snacks and are
currently carried in about 16,000 retail locations across the U.S.
and Canada.
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, 2018 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.
Compass Diversified
HoldingsRyan J. FaulkinghamChief Financial
Officer203.221.1703ryan@compassequity.com |
Investor
Relations and Media Contact:The IGB Group Leon Berman 212.477.8438
lberman@igbir.com |
Compass Diversified (NYSE:CODI)
Historical Stock Chart
From Aug 2024 to Sep 2024
Compass Diversified (NYSE:CODI)
Historical Stock Chart
From Sep 2023 to Sep 2024