Compass Diversified Completes Partnership with Leading “Better-for-You” Feminine Care Brand The Honey Pot Company
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Insights
The partnership between Compass Diversified and The Honey Pot Co. represents a strategic move within the consumer health sector, particularly in the niche of feminine hygiene and wellness products. With an enterprise value of $380 million for the acquisition, this partnership signals confidence in the growth potential of The Honey Pot Co.'s plant-derived, clinically tested product line.
From a market perspective, the investment by CODI could be seen as a significant endorsement of the burgeoning market for natural and holistic feminine care products. The Honey Pot Co.'s positioning in this space could allow CODI to tap into the increasing consumer demand for products that are perceived as safer and more environmentally friendly than traditional options.
For investors, the retention of a significant minority stake by The Honey Pot Co.'s co-founders and management team, alongside the continuation of Beatrice Dixon in her leadership role, may be viewed positively. It suggests stability and the preservation of the brand's original vision, which can be crucial for maintaining consumer trust and loyalty in a market that values authenticity.
The completion of the acquisition for $380 million, excluding working capital and other customary adjustments, suggests a robust valuation for The Honey Pot Co., reflecting its potential for future earnings and market expansion. The partnership is likely to influence CODI's financials, with the potential for revenue growth and diversification of its portfolio.
Investors will be interested in the impact of this acquisition on CODI's balance sheet, particularly in terms of how the acquisition was financed and the implications for CODI's leverage and liquidity. The long-term value creation will depend on the successful integration of The Honey Pot Co. into CODI's existing operations and the realization of synergies.
Moreover, the acquisition costs and how they are amortized will be an area of interest for shareholders and analysts alike, as these costs can affect net income in the short term but may be justified by long-term strategic benefits.
The Honey Pot Co.'s focus on plant-derived ingredients and clinically tested formulas is indicative of a larger trend within the consumer health industry towards natural and holistic products. This partnership could enable The Honey Pot Co. to leverage CODI's resources to scale up production, expand distribution channels and increase market penetration.
The emphasis on education and self-care in the feminine hygiene sector is a critical differentiator. The partnership's potential to destigmatize feminine care and promote holistic wellness could resonate with a growing consumer base that is increasingly health-conscious and values transparency in product ingredients and corporate practices.
For stakeholders, the success of this partnership will hinge on the ability to maintain product quality and brand integrity while scaling operations. The impact on the competitive landscape could be significant if The Honey Pot Co. can establish itself as a leader in the natural feminine care niche.
WESTPORT, Conn., Feb. 01, 2024 (GLOBE NEWSWIRE) -- Compass Diversified (NYSE: CODI) (“CODI” or the “Company”), an owner of leading middle market businesses, today announced the completion of the Company’s previously announced partnership with The Honey Pot Company, LLC (“The Honey Pot Co.”), pursuant to an agreement entered into on January 14, 2024.
Based in Atlanta, Georgia, the idea for The Honey Pot Co.’s feminine wash began in an apartment kitchen in 2012, fueled by Co-Founder Beatrice Dixon’s personal experiences and ultimate desire to change how the world uses and perceives feminine care products. Today, The Honey Pot Co. provides a complete feminine care system – powered by plant-derived ingredients and clinically tested formulas – with a diverse set of products across the feminine hygiene, menstrual, consumer health and sexual wellness categories.
The acquisition was completed for an enterprise value of
“We are excited to have completed our partnership with The Honey Pot Co. and look forward to working with Beatrice and her talented team,” said Elias Sabo, CEO of Compass Diversified. “Pairing CODI’s resources with The Honey Pot Co.’s disruptive products will allow us to further their commitment to innovation, education, and self-care while also positioning us to capitalize on what we expect to be significant growth runway ahead.”
Ms. Dixon commented, “The completion of this deal with CODI is a big step forward for our company. We are now better positioned to amplify our impact as we continue to fulfill our mission of destigmatizing feminine care and further democratizing holistic wellness.”
Perella Weinberg Partners served as exclusive financial advisor and Winston & Strawn LLP acted as legal counsel to The Honey Pot Co., while Gibson, Dunn & Crutcher LLP represented The Honey Pot Co.’s management. William Blair & Company acted as exclusive financial advisor and Ropes & Gray LLP acted as legal counsel to Compass Diversified.
About The Honey Pot Co.
The Honey Pot Company is a leading feminine care brand, powered by plant-derived ingredients and clinically tested formulas. Founded in 2012 by CEO Beatrice Dixon, The Honey Pot Company is rooted in the belief that all products should be made with healthy and efficacious ingredients that are kind to and safe for skin. The company offers an extensive range of holistic wellness products across the feminine hygiene, menstrual, consumer health, and sexual wellness categories. The Honey Pot Company’s mission is to educate, support, and provide consumers around the world with tools and resources that promote menstrual health and vaginal wellness. Their products can be found in more than 33,000 stores across the U.S. including Target, Walmart, CVS, and Walgreens, as well as online. For more information on The Honey Pot Company, please visit thehoneypot.co.
About Compass Diversified (“CODI”)
Since its founding in 1998 and IPO in 2006, CODI has consistently executed on its strategy of owning and managing a diverse set of highly defensible, middle-market businesses across the niche 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 within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements with regard to the expectations related to the future performance and management of The Honey Pot Co. and CODI. Words such as "believes," "expects," “will,” “anticipates,” “intends,” “continue,” "projects," “potential,” “assuming,” 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, some of which are not currently known to CODI. In addition to factors previously disclosed in CODI’s reports filed with the SEC, the following factors, among others, could cause actual results to differ materially from forward-looking statements: difficulties and delays in integrating The Honey Pot’s business or fully realizing cost savings and other benefits; business disruption following the closing of the transaction; changes in the economy, financial markets and political environment; risks associated with possible disruption in CODI’s operations or the economy generally due to terrorism, natural disasters, social, civil and political unrest or the COVID-19 pandemic; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); and other considerations that may be disclosed from time to time in CODI’s publicly disseminated documents and filings. Further information regarding CODI and factors which could affect the forward-looking statements contained herein can be found in CODI’s annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Forward-looking statements speak only as of the date they are made. 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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FAQ
What is the enterprise value of the acquisition of The Honey Pot Company, LLC by Compass Diversified?
Who will continue to lead The Honey Pot Company, LLC after the completion of the partnership with Compass Diversified?
What products does The Honey Pot Company, LLC provide?
