COMPASS DIVERSIFIED HOLDINGS (NYSE:CODI) Files An 8-K Other Events
Item 8.01 Other Events
Compass Group Diversified Holdings LLC (the Company) and Compass
Diversified Holdings (Holdings and, together with the Company,
collectively CODI, us or we) acquires and manages small to middle
market businesses in the ordinary course of its business. The
following description relates to the recent acquisition of one
such business.
Diversified Holdings (Holdings and, together with the Company,
collectively CODI, us or we) acquires and manages small to middle
market businesses in the ordinary course of its business. The
following description relates to the recent acquisition of one
such business.
Crosman Corp.
On June 2, 2017, Bullseye Holding Company LLC, a Delaware limited
liability company (Seller) and the indirect owner of all the
equity interests of Crosman Corp., a Delaware corporation
(Crosman), Bullseye Acquisition Corporation, a Delaware
corporation (“Bullseye”), Wellspring Capital Partners IV, L.P., a
Delaware limited partnership, and CBCP Acquisition Corp., a
Delaware corporation and wholly-owned subsidiary of the Company
(the Buyer), entered into an equity purchase agreement (the
Transaction Agreement) to which the Buyer purchased all the
outstanding equity interests of Bullseye from Seller (the
Transaction). Upon the completion of the Transaction, Crosman
became a branded product business of the Company. The Transaction
Agreement contains customary representations, warranties,
covenants and indemnification provisions. At closing, the Buyer
obtained representation and warranty insurance, which will
provide coverage for breaches of certain representation and
warranties contained in the Transaction Agreement, subject to
deductibles and certain other terms and conditions.
liability company (Seller) and the indirect owner of all the
equity interests of Crosman Corp., a Delaware corporation
(Crosman), Bullseye Acquisition Corporation, a Delaware
corporation (“Bullseye”), Wellspring Capital Partners IV, L.P., a
Delaware limited partnership, and CBCP Acquisition Corp., a
Delaware corporation and wholly-owned subsidiary of the Company
(the Buyer), entered into an equity purchase agreement (the
Transaction Agreement) to which the Buyer purchased all the
outstanding equity interests of Bullseye from Seller (the
Transaction). Upon the completion of the Transaction, Crosman
became a branded product business of the Company. The Transaction
Agreement contains customary representations, warranties,
covenants and indemnification provisions. At closing, the Buyer
obtained representation and warranty insurance, which will
provide coverage for breaches of certain representation and
warranties contained in the Transaction Agreement, subject to
deductibles and certain other terms and conditions.
The Transaction was completed for a purchase price of
approximately $152 million (excluding working capital and other
customary adjustments). The Company funded the purchase price
through available cash on its balance sheet and a draw on its
revolving credit facility. Crosmans management team invested in
the Transaction alongside the Company. The Companys equity
ownership in Crosman as a result of the Transaction is
approximately 98.9%.
approximately $152 million (excluding working capital and other
customary adjustments). The Company funded the purchase price
through available cash on its balance sheet and a draw on its
revolving credit facility. Crosmans management team invested in
the Transaction alongside the Company. The Companys equity
ownership in Crosman as a result of the Transaction is
approximately 98.9%.
Crosman is the worlds leading designer, manufacturer and marketer
of airguns, archery products and related accessories.
Headquartered in East Bloomfield, NY, Crosman serves over 425
customers worldwide, including mass merchants, sporting goods
retailers, online channels and distributors serving smaller
specialty stores and international markets. Its diversified
product portfolio includes the widely known Crosman, Benjamin and
CenterPoint brands. For the trailing twelve months ended April
30, 2017, Crosman reported net revenue of approximately $118
million, adjusted EBITDA of approximately $20 million and had
approximately $2.7 million in capital expenditures.
of airguns, archery products and related accessories.
Headquartered in East Bloomfield, NY, Crosman serves over 425
customers worldwide, including mass merchants, sporting goods
retailers, online channels and distributors serving smaller
specialty stores and international markets. Its diversified
product portfolio includes the widely known Crosman, Benjamin and
CenterPoint brands. For the trailing twelve months ended April
30, 2017, Crosman reported net revenue of approximately $118
million, adjusted EBITDA of approximately $20 million and had
approximately $2.7 million in capital expenditures.
Concurrently with the closing of the Transaction, the Company
provided a credit facility to Crosman as borrower, and certain
affiliates of Crosman as co-borrowers (collectively, the
Borrowers), to which a secured revolving loan commitment and
secured term loans were made available to the Borrowers (the
Bullseye Credit Agreement). The initial aggregate commitment
under these loans at the close of the Transaction was $107
million. The loans to the Borrowers are guaranteed by the Buyer
and by certain subsidiaries of the Buyer (collectively, the
Guarantors) and are secured by security interests in
substantially all the assets and properties of the Borrowers and
the Guarantors (together, the Loan Parties), including a pledge
by each Loan Party (other than Crosman) of 50% of the equity
interests in its respective subsidiary and by Crosman of 65% of
its equity interests in its sole subsidiary, Crosman Europe ApS.
In addition to being similar to the terms and conditions of the
credit facilities in place with our existing subsidiary
businesses, the Company believes that the agreed terms of the
loans are fair and reasonable given the leverage and risk profile
of Bullseye and its subsidiaries.
provided a credit facility to Crosman as borrower, and certain
affiliates of Crosman as co-borrowers (collectively, the
Borrowers), to which a secured revolving loan commitment and
secured term loans were made available to the Borrowers (the
Bullseye Credit Agreement). The initial aggregate commitment
under these loans at the close of the Transaction was $107
million. The loans to the Borrowers are guaranteed by the Buyer
and by certain subsidiaries of the Buyer (collectively, the
Guarantors) and are secured by security interests in
substantially all the assets and properties of the Borrowers and
the Guarantors (together, the Loan Parties), including a pledge
by each Loan Party (other than Crosman) of 50% of the equity
interests in its respective subsidiary and by Crosman of 65% of
its equity interests in its sole subsidiary, Crosman Europe ApS.
In addition to being similar to the terms and conditions of the
credit facilities in place with our existing subsidiary
businesses, the Company believes that the agreed terms of the
loans are fair and reasonable given the leverage and risk profile
of Bullseye and its subsidiaries.
The foregoing brief description of the Transaction Agreement is
not meant to be exhaustive and is qualified in its entirety by
the Transaction Agreement itself, which is attached hereto as
Exhibit 99.1 to this Current Report on Form 8-K.
not meant to be exhaustive and is qualified in its entirety by
the Transaction Agreement itself, which is attached hereto as
Exhibit 99.1 to this Current Report on Form 8-K.
On June 5, 2017, the Company issued a Press Release announcing
the Transaction. A copy of the Press Release is filed as Exhibit
99.2 to this Current Report on Form 8-K.
the Transaction. A copy of the Press Release is filed as Exhibit
99.2 to this Current Report on Form 8-K.
Section 9 Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
|
99.1
|
Equity Purchase Agreement, dated June 2, 2017, by and
among Bullseye Holding Company LLC, a Delaware limited liability company, Bullseye Acquisition Corporation, a Delaware corporation, Wellspring Capital Partners IV, L.P., a Delaware limited partnership and CBCP Acquisition Corp., a Delaware corporation. |
||
|
99.2
|
Press Release of CODI dated June 5, 2017 announcing the
Transaction. |
||
to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
|
Date: June 5, 2017
|
COMPASS DIVERSIFIED HOLDINGS
|
||
|
By:
|
/s/ Ryan J. Faulkingham
|
||
|
Ryan J. Faulkingham
|
|||
|
Regular Trustee
|
|||
About COMPASS DIVERSIFIED HOLDINGS (NYSE:CODI)
Compass Diversified Holdings (the Trust) and Compass Group Diversified Holdings, LLC, (the Company), acquires and manages a group of small and middle-market businesses. The Company’s segments include The Ergo Baby Carrier, Inc. (Ergobaby), Liberty Safe and Security Products, Inc. (Liberty Safe or Liberty), Fresh Hemp Foods Ltd. (Manitoba Harvest), Compass AC Holdings, Inc. (ACI or Advanced Circuits), AMT Acquisition Corporation (Arnold or Arnold Magnetics), Clean Earth Holdings, Inc. (Clean Earth), Candle Lamp Company, LLC (Sterno or Sterno Products) and Tridien Medical, Inc. (Tridien). The Company also owns a non-controlling interest of approximately 41% in Fox Factory Holding Corp. (FOX). Compass Group Management LLC, (CGM or the Manager), manages the day-to-day operations of the Company, and oversees the management and operations of its businesses pursuant to a management services agreement (MSA).
