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8-K - FORM 8-K - Compass Group Diversified Holdings LLC | w79877e8vk.htm |
EX-99.1 - EX-99.1 - Compass Group Diversified Holdings LLC | w79877exv99w1.htm |
Exhibit 99.2
Compass Diversified Holdings
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Investor Relations and Media Contacts: | |
James J. Bottiglieri
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The IGB Group | |
Chief Financial Officer
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Leon Berman / Michael Cimini | |
203.221.1703
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212.477.8438 / 212.477.8261 | |
jbottiglieri@compassdiversifiedholdings.com
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lberman@igbir.com / mcimini@igbir.com |
Compass Diversified Holdings Acquires
The ERGO Baby Carrier, Inc.
The ERGO Baby Carrier, Inc.
Westport, Conn., September 17, 2010 Compass Diversified Holdings (Nasdaq: CODI) (CODI or
the Company) an owner of leading middle market businesses, announced today that on September 16,
2010, it entered into an agreement to acquire and consummated the acquisition of The ERGO Baby
Carrier, Inc. (ERGObaby).
Based in Pukalani, Hawaii (Maui) and founded in 2003, ERGObaby is a premier designer, marketer and
distributor of babywearing products and accessories. ERGObabys reputation for product innovation,
reliability and safety has led to numerous awards and accolades from consumer surveys and
publications, including Parenting Magazine, Pregnancy Magazine and Wired Magazine. ERGObaby offers
a broad range of wearable baby carriers and related products that are sold through more than 700
retailers and web shops in the United States and internationally in approximately 20 countries.
The total enterprise value in the transaction was $91 million and represents approximately seven
times ERGObabys expected 2010 EBITDA. Acquisition related costs were approximately $1.9 million.
In addition, an Internal Revenue Code Section 338 (h) (10) election will be made with respect to
the transaction, which will allow the company to amortize a substantial portion of the purchase
price for tax purposes.
CODI funded the acquisition through drawings on its revolving credit facility. CODIs initial
equity ownership in ERGObaby as a result of the transaction is approximately 84% on a primary
basis. ERGObabys former owner and certain other investors invested alongside CODI and own the
remaining 16%. For the year ended December 31, 2009, ERGObaby reported revenue of $22.8 million.
Commenting on the acquisition, Joe Massoud, CEO of CODI, said, We are pleased to once again take
advantage of our financial strength to expand our family of niche leading businesses.
ERGObaby is an exciting company for us to acquire due to its attractive industry positioning,
passionate and loyal customer base, stability of core product demand and potential for growth
through channel and geographic expansion, as well as product extension. ERGObabys strong brand
recognition with its target customers in the U.S. and abroad reflects its history of design
innovation and superior quality. Additionally, we believe that favorable market trends, including
increasing births worldwide, rising affluence in non-western markets and the rising popularity of
wearable baby carriers, will continue to drive demand for child mobility and transport products.
Our plan is to work with management to increase customer penetration levels both domestically and
internationally and expand the companys product offerings, leveraging off the strength of the
ERGObaby brand. We look forward to working closely with Karin Frost, an industry pioneer, and the
rest of ERGObabys management team to continue ERGObabys historically strong growth.
Mr. Massoud continued, This platform acquisition, our second to date in 2010, will be immediately
accretive and increase CODIs Cash Flow Available for Distribution and Reinvestment. Going forward,
we remain well positioned to draw upon our balance sheet strength to capitalize on additional
attractive opportunities on behalf of our shareholders.
Karin Frost, Founder and Chief Executive Officer of ERGObaby, commented, The combination of
ERGObaby and Compass Diversified Holdings presents exciting opportunities to further expand our
business. In choosing to work with CODI, I was attracted by their unique financing structure and
their successful track record in growing niche market leaders. I am optimistic that, as part of
CODI, ERGObaby will further build upon its tradition of providing high-quality wearable baby
carriers and related products to satisfied customers worldwide.
Additional information on the acquisition will be available on the Companys current report on Form
8-K that will be filed with the Securities and Exchange Commission later today.
About Compass Diversified Holdings (CODI)
Compass Diversified Holdings (CODI) owns and manages a diverse family of established North
American middle market businesses. Each of its eight subsidiaries is a leader in their 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 owners.
Our subsidiaries are engaged in the following lines of business:
| The manufacture of quick-turn, prototype and production rigid printed circuit boards (Advanced Circuits, www.advancedcircuits.com); | ||
| The design and manufacture of promotionally priced upholstered furniture (American Furniture Manufacturing, www.americanfurn.net); |
| 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, www.anodynemedicaldevice.com); | ||
| The design and marketing of wearable baby carriers and related products (ERGObaby, www.ergobabycarriers.com); | ||
| The design, manufacture and marketing of premium suspension products for mountain bikes and powered off-road vehicles (Fox Racing Shox, www.foxracingshox.com); | ||
| The design, sourcing and fulfillment of logo based promotional products (Halo Lee Wayne, www.haloleewayne.com); | ||
| The design and manufacture of premium home and gun safes (Liberty Safe, www.libertysafe.com); and | ||
| The provision of temporary staffing services, operating approximately 300 locations in 29 states (Staffmark, www.staffmark.com). |
To find out more about Compass Diversified Holdings, please visit
www.compassdiversifiedholdings.com.
This press release may contain certain forward-looking statements, including statements with regard
to the future performance of the Company. 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 Securities and Exchange Commission for
the year ended December 31, 2009 and other filings with the Securities and Exchange Commission.
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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