Compass Diversified has sold Ergobaby to Highlander Partners, using proceeds to reduce debt and enhance corporate growth.
Quiver AI Summary
Compass Diversified has announced the completion of the sale of its majority-owned subsidiary, Ergobaby, to private investment firm Highlander Partners. The proceeds from this transaction will be used to pay down debt and for general corporate purposes. CEO Elias Sabo expressed pride in Ergobaby's status as a leader in premium juvenile products and indicated that the company will focus on acquiring innovative brands to enhance long-term shareholder value. Ergobaby's CEO, Jason Frame, shared his appreciation for the support from Compass Diversified and excitement for the future under Highlander. The sale was facilitated by financial advisor Robert W. Baird & Co and legal counsel from Gibson, Dunn & Crutcher LLP for Compass Diversified, while Katten Muchin Rosenman LLP represented Highlander.
Potential Positives
- Compass Diversified completed the sale of its majority-owned subsidiary Ergobaby, allowing the company to pay down debt, which strengthens its financial position.
- The proceeds from the sale will be reinvested in acquiring innovative and disruptive brands, positioning CODI for future growth and long-term shareholder value.
- The sale reflects CODI's successful execution of its strategy to manage and maximize the potential of its subsidiaries in the middle market sector.
Potential Negatives
- The sale of Ergobaby may indicate potential challenges in CODI's portfolio management or pressures to divest to manage debt, which could raise concerns among investors about the company's overall financial health.
- The decision to use the sale proceeds primarily for debt repayment may suggest that the company is struggling to generate sufficient cash flow from its existing operations, which could weaken investor confidence in future growth prospects.
- Forward-looking statements in the press release highlight uncertainties regarding CODI's future performance and business plans, which could lead to skepticism from stakeholders about the company's ability to execute its strategy effectively.
FAQ
What recent acquisition did Compass Diversified announce?
Compass Diversified announced the sale of its majority-owned subsidiary, Ergobaby, to Highlander Partners.
What will Compass Diversified do with the proceeds from the Ergobaby sale?
The proceeds from the sale will be used to pay down debt and for general corporate purposes.
Who is the CEO of Compass Diversified?
Elias Sabo is the CEO of Compass Diversified, overseeing the company’s strategic direction.
How does Compass Diversified generate value for shareholders?
CODI generates value by owning and managing highly defensible middle-market businesses and investing in their growth.
What expertise does Compass Diversified utilize for its subsidiaries?
CODI leverages its permanent capital base, disciplined approach, and actionable expertise to support its subsidiaries.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$CODI Insider Trading Activity
$CODI insiders have traded $CODI stock on the open market 11 times in the past 6 months. Of those trades, 6 have been purchases and 5 have been sales.
Here’s a breakdown of recent trading of $CODI stock by insiders over the last 6 months:
- MAGYAR HOLDINGS LLC CGI has traded it 5 times. They made 0 purchases and 5 sales, selling 535,274 shares.
- PATRICK A MACIARIELLO purchased 5,000 shares.
- STEPHEN KELLER has traded it 2 times. They made 2 purchases, buying 10,000 shares and 0 sales.
- SIMON HEIDI LOCKE purchased 19,800 shares.
- RYAN J FAULKINGHAM has traded it 2 times. They made 2 purchases, buying 6,250 shares and 0 sales.
To track insider transactions, check out Quiver Quantitative's insider trading dashboard.
$CODI Hedge Fund Activity
We have seen 95 institutional investors add shares of $CODI stock to their portfolio, and 86 decrease their positions in their most recent quarter.
Here are some of the largest recent moves:
- VANGUARD GROUP INC added 424,668 shares (+8.5%) to their portfolio in Q3 2024
- BLACKROCK, INC. added 401,358 shares (+10.5%) to their portfolio in Q3 2024
- ESSEX FINANCIAL SERVICES, INC. added 207,335 shares (+18.9%) to their portfolio in Q3 2024
- FMR LLC added 151,783 shares (+115.0%) to their portfolio in Q3 2024
- SWEDBANK AB added 149,375 shares (+inf%) to their portfolio in Q3 2024
- ALLSPRING GLOBAL INVESTMENTS HOLDINGS, LLC added 140,384 shares (+3.4%) to their portfolio in Q3 2024
- CHARLES SCHWAB INVESTMENT MANAGEMENT INC removed 118,036 shares (-23.0%) from their portfolio in Q3 2024
To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.
Full Release
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.
Investor Relations
Compass Diversified
irinquiry@compassdiversified.com
Gateway Group
Cody Slach
949.574.3860
CODI@gateway-grp.com
Media Relations
Compass Diversified
mediainquiry@compassdiversified.com
The IGB Group
Leon Berman
212.477.8438
lberman@igbir.com
This article was originally published on Quiver News, read the full story.
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