WESTPORT, Conn., Oct. 17, 2011 /PRNewswire/ -- Compass Diversified
Holdings (NYSE: CODI) ("CODI" or the "Company"), an owner of
leading middle market businesses, announced today that it has
simultaneously entered into a definitive agreement to sell and
consummated the sale of its majority owned subsidiary, Staffmark
Holdings, Inc. ("Staffmark"), to a subsidiary of Japan-based Recruit Co., Ltd., ("Recruit") for
a total enterprise value of $295
million.
The transaction is subject to customary escrow and working
capital provisions. After these adjustments, as well as for
an allocation to Staffmark's non-controlling shareholders and the
payment of all of the transaction expenses, CODI received
approximately $220 million of total
proceeds from the sale at closing. This amount was in respect
of its debt and equity interests in Staffmark and the payment of
accrued interest and fees. In addition, the transaction also
increases availability under CODI's revolving credit facility by
approximately $67 million, as letters
of credit guaranteeing payments for Staffmark's workers
compensation liability are no longer required to be provided by
CODI. The Company anticipates recording a gain on the sale of
Staffmark ranging between $75 million and
$90 million for the quarter ended December 31, 2011.
Commenting on the transaction, Alan
Offenberg, CODI's Chief Executive Officer, stated, "The sale
of Staffmark represents a highly profitable opportunity for us to
monetize our interest in a great company on behalf of our
shareholders. In addition, this sale creates significant
liquidity for our company and expands our capacity for pursuit of
future growth opportunities. While it was a difficult
decision to end our long-standing relationship with Staffmark, one
of our initial subsidiaries at the time of our IPO in May of 2006,
we enjoyed and appreciate the opportunity to have worked with its
outstanding management team for all these years. Together, we
weathered and thrived through the recent economic turmoil, building
Staffmark into one of the premier staffing companies in the U.S.,
while growing the company's cash flow significantly during our
period of ownership. We wish both Staffmark and Recruit continued
success in the future."
Mr. Offenberg added, "With this transaction, CODI has now
realized more than $185 million in
gains since going public in May 2006.
As in the past, we intend to utilize the proceeds from the
sale of Staffmark to further strengthen our balance sheet and take
advantage of both internal and external opportunities, while
maintaining the ability to provide attractive distributions to our
owners."
The proceeds will be used to repay substantially all of the
outstanding debt under the Company's revolving credit facility.
Additional information on the transaction will be available
on the Company's current report on Form 8-K that will be filed with
the Securities and Exchange Commission (the "SEC") later this
week.
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 manufacture of personal hydration products for
outdoor, recreation and military use (CamelBak
Products, www.camelbak.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 Branded Solutions, www.halo.com); and
- The design and manufacture of premium home and gun safes
(Liberty Safe,
www.libertysafe.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, 2010 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.
SOURCE Compass Diversified Holdings