CODI Completes Strategic Capital Raise and Adds $290 Million in Gross Proceeds
May 11 2020 - 4:15PM
Compass Diversified Holdings (NYSE: CODI) (the “Trust”) and Compass
Group Diversified Holdings, LLC (the “Company” and, together with
the Trust, “CODI”), an owner of leading middle market businesses,
raised $290 million in gross proceeds from its previously announced
capital markets activity, consisting of approximately $88 million
from the issuance of new common equity and $202 million from its
senior unsecured notes offering, before deducting underwriting
discounts and commissions and other offering expenses.
These transactions further enhance CODI’s financial profile,
bolstering its already strong liquidity position as reported in its
Q1 2020 earnings report. CODI used the net proceeds from the common
share offering and the sale of the 8.000% senior unsecured notes
due 2026 (the “Additional Notes”) to repay the $200 million
outstanding balance on the Company’s existing revolving credit
facility, and the remaining $90 million of cash provides the
Company with additional liquidity, which can be used
opportunistically to pursue future acquisitions and for general
corporate purposes. Including proceeds from this strategic capital
raise, cash and cash equivalents on the Company’s balance sheet,
and availability on the Company’s revolving credit facility with
the ability to upsize by $250 million, CODI has approximately $1.0
billion of total liquidity available to opportunistically pursue
future acquisitions.
CODI closed its public offering of 5,000,000 common shares at a
price to the public of $17.60 per share and has granted the
underwriters a 30-day option to purchase an additional 750,000
common shares. Additionally, CODI completed its previously
announced private add-on offering of $200 million of the Additional
Notes at an issue price of 101.000%, plus accrued interest from May
1, 2020 through the closing date. The Additional Notes were issued
under the indenture dated as of April 18, 2018 and will mature on
May 1, 2026. Interest will accrue on the Additional Notes from May
1, 2020, and the first interest payment date will be November 1,
2020.
On May 5, 2020, Moody’s Investors Service affirmed CODI's
Corporate Family Rating at Ba3 and Probability of Default Rating at
Ba3-PD. Moody's also upgraded the senior secured revolving credit
facility due 2023 rating to Ba1 from Ba2, the senior unsecured
notes due 2026 rating to B1 from B2 and assigned a B1 rating to the
proposed $200 million add-on senior unsecured notes due 2026.
“Our permanent capital structure has always been a unique
competitive advantage, and this capital raise underscores our
ability to tap into the capital markets efficiently and further
positions CODI to execute on compelling opportunities in an
unprecedented environment,” said Elias Sabo, Chief Executive
Officer of Compass Diversified Holdings. “The enthusiastic response
to our offerings in these conditions speaks volumes about the
confidence in our team and our ability to prudently identify and
invest in leading middle market businesses for the long-term.”
Mr. Sabo continued, “While the full economic impact of the
global response to COVID-19 is yet to be seen, there will
undoubtedly be new opportunities in the coming months to
selectively partner with management teams that can benefit from our
deep sector knowledge, operational expertise, and permanent capital
base as they manage through the near-term uncertainty and position
themselves for years to come. This capital raise gives us
meaningful financial flexibility and we look forward to putting
this money to work as the current dislocation begins to
settle.”
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 technical 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);
- 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 design and manufacture of baseball and softball equipment
and apparel (Marucci Sports);
- The manufacture and marketing of portable food warming systems,
creative indoor and outdoor lighting, and home fragrance solutions
for the foodservice industry and consumer markets
(Sterno); and
- The design, manufacture and marketing of airguns, archery
products, optics and related accessories (Velocity
Outdoor).
Forward Looking Statements
This press release contains certain forward-looking statements,
including statements with regard to the use of proceeds from the
offerings, potential future acquisitions and CODI’s future
operations and performance. 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, 2019 and in the
Form 10-Q filed by CODI with the SEC for the quarter ended March
31, 2020, as well as 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.
Contacts:
Investor Relations:The IGB Group Leon Berman
212-477-8438
lberman@igbir.com
Media Contact:Joele Frank, Wilkinson Brimmer
KatcherJon Keehner / Julie Oakes / Kate Thompson212-355-4449
Compass Diversified (NYSE:CODI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Compass Diversified (NYSE:CODI)
Historical Stock Chart
From Apr 2023 to Apr 2024