Compass Diversified Announces Sale of Marucci Sports for $572 Million
03 November 2023 - 7:05AM
Compass Diversified (NYSE: CODI) (“CODI” or the “Company”), an
owner of leading middle market businesses, announced today it has
entered into a definitive agreement (the “Agreement”) to sell its
majority owned subsidiary, Wheelhouse Holdings, Inc., the parent
company of Marucci Sports, LLC (“Marucci”), to Fox Factory Holding
Corp. (NASDAQ: FOXF) (“FOX”), a designer and manufacturer of
performance-defining ride dynamics products primarily for a wide
range of bicycles, on-road and off-road vehicles.
Under the terms of the Agreement, Marucci will
be sold to FOX for an enterprise value of $572 million, subject to
certain working capital and other adjustments. CODI expects to
realize a pre-tax gain on the sale of between $225 million to $245
million. Proceeds from the transaction will be used to pay down
outstanding debt and for general corporate purposes.
“We are very proud of the growth Marucci has
seen under our ownership and feel fortunate to have been able to
partner with the Marucci management team,” said Elias Sabo, CEO of
Compass Diversified. “We acquired the business in April 2020 based
on our confidence in Marucci’s brand and management team. This was
at a time when few transactions were being completed due to the
pandemic, yet our flexible capital structure allowed us to execute
in times of uncertainty and generate value for our shareholders.
Since then, the Marucci team has acted decisively, growing its core
business and gaining share in new markets like fielding gloves and
softball. Additionally, we expanded the Marucci product portfolio
through the acquisitions of Lizard Skins and Baum Bat. Thank you to
Kurt and the entire Marucci team for their contributions over the
last several years, and we wish them nothing but continued
success.”
Kurt Ainsworth, Co-Founder and CEO of Marucci
Sports, commented: “We are grateful for our partnership with the
CODI team and look forward to further growth under FOX’s ownership.
FOX’s enthusiast culture, coupled with its focus on driving growth
through strong brands, highly engineered products and disruptive
technologies fits well with our values and mission. We look forward
to leveraging their innovation and growth success as we expand our
sales reach and breadth. We thank CODI for their relentless support
during our partnership.”
The closing of this transaction is subject to
customary terms and conditions, including regulatory approval, and
is expected to occur in November 2023.
Jefferies LLC is acting as exclusive financial
advisor and Ropes & Gray LLP and Jones Walker LLP are acting as
legal counsel to CODI. Squire Patton Boggs (US) LLP is acting as
legal counsel to FOX.
About Compass Diversified
Since its founding in 1998, CODI has
consistently executed 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.
About Fox Factory Holding Corp. (Nasdaq:
FOXF)
Fox Factory Holding Corp. designs and
manufactures performance-defining ride dynamics products primarily
for bicycles, on-road and off-road vehicles and trucks,
side-by-side vehicles, all-terrain vehicles, snowmobiles, specialty
vehicles and applications, motorcycles, and commercial trucks. FOX
is a direct supplier to leading powered vehicle original equipment
manufacturers (“OEMs”). Additionally, FOX supplies top bicycle OEMs
and their contract manufacturers, and provides aftermarket products
to retailers and distributors.
FOX is a registered trademark of Fox Factory,
Inc. NASDAQ Global Select Market is a registered trademark of The
NASDAQ OMX Group, Inc. All rights reserved.
FORWARD-LOOKING STATEMENTS
This press release contains certain
forward-looking statements, including statements with regard to the
expectations related to the sale of Marucci. Words such as
"believes," "expects," 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, including, but not
limited to, the risk that the sale of Marucci may not be completed
in a timely manner or at all; risks associated with the disposition
of Marucci generally, such as the inability to obtain, delays in
obtaining, or the imposition of burdensome conditions imposed in
connection with obtaining regulatory approval and the occurrence of
any event, change or other circumstances that could give rise to
the termination of the definitive agreement entered into for the
disposition of Marucci; and the effect of the announcement or
pendency of the sale on Marucci’s business relationships,
performance, and business generally. Certain other 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, 2022 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
irinquiry@compassdiversified.com
Gateway GroupCody Slach949.574.3860CODI@gateway-grp.com
Media Relations
The IGB GroupLeon Berman212.477.8438lberman@igbir.com
Compass Diversified (NYSE:CODI)
Historical Stock Chart
From Aug 2024 to Sep 2024
Compass Diversified (NYSE:CODI)
Historical Stock Chart
From Sep 2023 to Sep 2024