Compass Diversified Announces Sale of Ergobaby
Compass Diversified (NYSE: CODI) has announced the sale of its majority-owned subsidiary, Ergobaby, to Highlander Partners, L.P., a Dallas-based private investment firm. The transaction was simultaneously agreed upon and completed. Proceeds from the sale will be allocated towards debt reduction and general corporate purposes.
Ergobaby, known for its premium juvenile products, will transition to new ownership under Highlander. CODI's CEO Elias Sabo expressed pride in Ergobaby's position as a global leader and indicated plans to continue acquiring and managing innovative brands to drive long-term shareholder value.
Compass Diversified (NYSE: CODI) ha annunciato la vendita della sua controllata di maggioranza, Ergobaby, a Highlander Partners, L.P., una società di investimento privata con sede a Dallas. La transazione è stata concordata e completata simultaneamente. Il ricavato della vendita sarà destinato alla riduzione del debito e a scopi aziendali generali.
Ergobaby, nota per i suoi prodotti giovanili di alta qualità, passerà a un nuovo proprietario sotto Highlander. Il CEO di CODI, Elias Sabo, ha espresso orgoglio per la posizione di Ergobaby come leader globale e ha indicato piani per continuare ad acquisire e gestire marchi innovativi per promuovere il valore a lungo termine per gli azionisti.
Compass Diversified (NYSE: CODI) ha anunciado la venta de su subsidiaria mayoritaria, Ergobaby, a Highlander Partners, L.P., una firma de inversión privada con sede en Dallas. La transacción fue acordada y completada simultáneamente. Los ingresos de la venta se destinarán a la reducción de deuda y propósitos corporativos generales.
Ergobaby, conocida por sus productos juveniles premium, pasará a ser de nueva propiedad bajo Highlander. El CEO de CODI, Elias Sabo, expresó su orgullo por la posición de Ergobaby como líder global y manifestó planes para seguir adquiriendo y gestionando marcas innovadoras para impulsar el valor a largo plazo para los accionistas.
Compass Diversified (NYSE: CODI)는 자회사 Ergobaby의 매각을 다이애스에 본사를 둔 사모펀드인 Highlander Partners, L.P.에 발표했습니다. 거래는 동시에 합의되고 완료되었습니다. 매각 수익금은 부채 상환 및 일반 기업 용도로 사용될 것입니다.
프리미엄 유아 제품으로 알려진 Ergobaby는 Highlander의 새로운 소유권으로 전환됩니다. CODI의 CEO Elias Sabo는 Ergobaby의 글로벌 리더로서의 입업에 자부심을 표명하고, 장기 주주 가치를 높이기 위해 혁신적인 브랜드를 계속 인수하고 관리할 계획을 밝혔다.
Compass Diversified (NYSE: CODI) a annoncé la vente de sa filiale majoritaire, Ergobaby, à Highlander Partners, L.P., une société d'investissement privée basée à Dallas. La transaction a été convenue et finalisée simultanément. Le produit de la vente sera alloué à la réduction de la dette et à des fins corporatives générales.
Ergobaby, connu pour ses produits juvéniles haut de gamme, passera sous la nouvelle propriété de Highlander. Le PDG de CODI, Elias Sabo, a exprimé sa fierté quant à la position d'Ergobaby en tant que leader mondial et a indiqué des projets pour continuer à acquérir et gérer des marques innovantes afin de doper la valeur à long terme pour les actionnaires.
Compass Diversified (NYSE: CODI) hat den Verkauf seiner mehrheitlich eigenen Tochtergesellschaft Ergobaby an Highlander Partners, L.P., eine private Investmentgesellschaft mit Sitz in Dallas, bekannt gegeben. Die Transaktion wurde gleichzeitig vereinbart und abgeschlossen. Die Erlöse aus dem Verkauf werden zur Schuldenreduzierung und für allgemeine Unternehmenszwecke verwendet.
Ergobaby, bekannt für seine hochwertigen Produkte für Kleinkinder, wird unter der neuen Eigentümerschaft von Highlander tätig sein. CODIs CEO Elias Sabo äußerte Stolz auf Ergobabys Position als globaler Marktführer und kündigte an, weiterhin innovative Marken zu erwerben und zu verwalten, um langfristigen Mehrwert für die Aktionäre zu schaffen.
- Proceeds will be used to reduce company debt
- Strategic exit allows CODI to pursue new acquisition opportunities
- Transaction completed simultaneously with agreement, indicating clean execution
- Loss of revenue stream from majority-owned subsidiary
- Reduction in business portfolio diversification
Insights
The sale of Ergobaby marks a strategic divestment for Compass Diversified, demonstrating active portfolio management. The transaction's immediate debt reduction impact strengthens CODI's balance sheet and creates dry powder for future acquisitions. While the deal price remains undisclosed, Ergobaby's position in the premium juvenile products market suggests a potentially favorable exit multiple.
The timing aligns with CODI's historical pattern of realizing value through strategic exits, typically holding portfolio companies for 5-7 years before monetization. The choice of Highlander Partners as the buyer, known for their consumer products expertise, indicates a well-matched strategic fit that could have influenced valuation terms.
For investors, this move signals CODI's commitment to portfolio optimization and capital redeployment. The debt reduction component is particularly noteworthy in the current high-interest-rate environment, potentially leading to reduced interest expenses and improved financial flexibility for future deals.
The transaction's structure as a simultaneous agreement and completion suggests efficient deal execution and minimal regulatory hurdles. The deployment of proceeds towards debt reduction represents prudent financial management, especially considering the macro environment where debt service costs remain elevated.
CODI's track record shows consistent success in building and selling middle-market businesses. The involvement of Baird as financial advisor and Gibson Dunn as legal counsel indicates a professionally managed transaction process that likely maximized shareholder value. The immediate availability of proceeds for debt reduction should positively impact CODI's credit metrics and borrowing capacity.
For retail investors, this transaction exemplifies CODI's business model of acquiring, growing and monetizing middle-market businesses. The focus on debt reduction suggests management's commitment to maintaining a strong balance sheet while preserving flexibility for future opportunistic acquisitions.
WESTPORT, Conn., Dec. 30, 2024 (GLOBE NEWSWIRE) -- Compass Diversified (NYSE: CODI) (“CODI” or the “Company”), an owner of leading middle market businesses, announced today the simultaneous entry into a definitive agreement (the “Agreement”) and completion of its sale of its majority-owned subsidiary, The Ergo Baby Carrier, Inc. (“Ergobaby”), to Highlander Partners, L.P. (“Highlander”), a Dallas-based private investment firm.
Proceeds from the transaction will be used to pay down debt and for general corporate purposes.
“We are proud of Ergobaby’s position as a global leader in premium juvenile products and are grateful for Jason and the team’s contributions over the years,” said Elias Sabo, CEO of Compass Diversified. “Looking ahead, we plan to use the proceeds from this sale to continue to acquire and manage innovative and disruptive brands, positioning our business for continued success and driving long-term shareholder value.”
Jason Frame, CEO of Ergobaby, commented: “We have been fortunate to work with the CODI team and thank them for their steadfast support. We are excited for our next chapter and feel we are well-positioned for continued success with Highlander.”
Robert W. Baird & Co acted as exclusive financial advisor and Gibson, Dunn & Crutcher LLP acted as legal counsel to CODI. Katten Muchin Rosenman LLP acted as legal counsel to Highlander.
About Compass Diversified
Since its IPO in 2006, CODI has consistently executed its strategy of owning and managing a diverse set of highly defensible, middle-market businesses across the industrial, branded consumer and healthcare sectors. The Company leverages its permanent capital base, long-term disciplined approach, and actionable expertise to maintain controlling ownership interests in each of its subsidiaries, maximizing its ability to impact long-term cash flow generation and value creation. 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 has consistently generated strong returns through its culture of transparency, alignment and accountability. For more information, please visit compassdiversified.com.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements, including statements with regard to the expectations related to the sale of Ergobaby, use of proceeds and CODI’s future performance and business plans. Words such as "believes," "expects," “plan,” 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 Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2023 and in 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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