Compass Diversified Holdings (NYSE: CODI) has acquired a controlling interest in CamelBak Products, it was announced Aug. 25. The purchase price of $257.5 million is based on a total enterprise value of $245.0 million and included $12.5 million of cash and working capital adjustments. The acquisition was made by a majority-owned subsidiary, CamelBak Acquisition Corp., which will allow Compass Diversified Holdings to amortize a substantial portion of the purchase price for tax purposes, the company stated.
The acquisition marks the exit of Bear Stearns, which has owned CamelBak since November 2003 when it acquired the hydration-specialist company from the Kransco Group, a San Francisco-based holding company, for $210 million. (click here to read the SNEWS story)
Compass Diversified Holdings funded the acquisition through drawing on its revolving credit facility, as well as through funds provided by a private placement of 1.575 million of its common shares at the closing market price of $12.50 per share on Aug. 23, 2011, to CGI Magyar Holdings, its largest shareholder. An affiliate of CGI Magyaralso purchased $45 million of convertible preferred stock in CamelBak Acquisition Corp. Acquisition-related costs were approximately $4.2 million.
Compass Diversified Holdings' initial common equity ownership in CamelBak Acquisition Corp. is approximately 89.9 percent. In addition to its equity investment in CamelBak Acquisition Corp., Compass Diversified Holdings provided loans totaling $145.2 million to CamelBak as part of the transaction. CamelBak's management team and a lender in Compass Diversified Holdings 's Revolving Credit Facility also invested in the transaction alongside Compass Diversified Holdings.
"We are pleased to further expand our family of niche market leaders with the acquisition of CamelBak, said Alan Offenberg, CEO of Compass Diversified Holdings, in a statement. "We expect to capitalize on the company's strong market position, as well as favorable macro trends, including the growing demand for improved everyday hydration. We believe CamelBak will continue to evolve its leading product and innovation platform and strengthen its relationships with top retailers and the military, thereby increasing consumer penetration levels globally. We look forward to working with CamelBak to continue to accelerate their growth."
Offenberg also stated that the company expects the acquisition of CamelBak to provide its owners with15 cents to 20 cents per share of cash flow accretion on a full year basis. “This acquisition increases the number of businesses we own to nine and further enhances our ability to provide attractive cash distributions and create significant value for our owners," said Offenberg in the statement.
Sally McCoy, CamelBak’s CEO since October 2006 (click here to read a SNEWS story covering that role), will continue to serve in the same capacity at the company, it was reported.
Compass Diversified Holdings (www.compassdiversifiedholdings.com) also owns:
- Advanced Circuits -- www.advancedcircuits.com
- American Furniture Manufacturing -- www.americanfurn.net
- Anodyne Medical Device -- www.anodynemedicaldevice.com
- ERGObaby -- www.ergobabycarriers.com
- Fox Racing Shox -- www.foxracingshox.com
- HALO Branded Solutions -- www.halo.com
- Liberty Safe -- www.libertysafe.com
- Staffmark -- www.staffmark.com