WESTPORT, Conn., March 6, 2012 /PRNewswire/ -- Compass Diversified
Holdings (NYSE: CODI) ("CODI" or the "Company"), an owner of
leading middle market businesses, announced that on March 5, 2012, it entered into an agreement to
acquire and consummated the acquisition of Arnold Magnetic
Technologies Holdings Corporation ("Arnold").
Based in Rochester, NY with an
operating history of more than 100 years, Arnold is a leading
global manufacturer of engineered magnetic solutions for a wide
range of specialty applications and end-markets, including energy,
medical, aerospace and defense, oil and gas exploration,
advertising, general industrial and automotive. From its
manufacturing facilities located in the
United States, the United
Kingdom, Switzerland and
China, the company produces
engineered magnetic assemblies in addition to high performance
permanent magnets, flexible magnets and precision foil products
that are mission critical in motors, generators, sensors and other
systems and components. Based on its long-term relationships, the
company has built a diverse and blue-chip customer base totaling
more than 2,000 clients worldwide. For the year ended December 31, 2011, Arnold reported revenue of
approximately $135.8 million.
The purchase price for Arnold of $130.5
million was based on a total enterprise value of
$124.2 million and included
$6.3 million of cash and working
capital adjustments. Arnold generated approximately $17.9 million of adjusted EBITDA for fiscal 2011.
Acquisition related costs were approximately $4.2 million. CODI funded the acquisition through
available cash on its balance sheet and a draw of $25.0 million on its revolving credit
facility.
CODI's initial common equity ownership in Arnold as a result of
the transaction is approximately 96.7% on a primary basis. In
addition to its equity investment in Arnold, CODI provided loans
totaling $85.5 million to Arnold as
part of the transaction. Arnold's management invested alongside
CODI and owns the remaining approximate 3.3%.
Commenting on the acquisition, Alan
Offenberg, CEO of CODI, said, "We are pleased to take
advantage of our balance sheet strength and expand our family of
niche leading businesses with the acquisition of Arnold. This
acquisition is consistent with our philosophy of owning companies
with a real reason to exist based on Arnold's strong and defensible
market position, diversified customer base, stable cash flow,
experienced management and attractive growth prospects. The
company's superior reputation as a global manufacturer of highly
engineered, application-specific magnet solutions is reflected in
its longstanding history of more than 100 years and extensive
client relationships across various end-markets. We are excited
about the favorable dynamics in the rare earth magnet industry,
including increasing demand from high-growth sectors such as
alternative energy. We look forward to working closely with
management to capitalize on the positive macro-trends and leverage
Arnold's engineering and product development capabilities to
accelerate the company's growth potential."
Mr. Offenberg added, "This platform acquisition, our fourth in
the past two years, increases the current number of businesses we
own to nine. Going forward, we will maintain our focus on utilizing
CODI's significant liquidity to capitalize on additional
acquisitions at favorable valuations and terms as we have in the
past."
Tim Wilson, Chief Executive
Officer of Arnold, will continue to serve in the same capacity at
the company. Mr. Wilson commented, "CODI's acquisition of Arnold
provides compelling opportunities to expand our business. By
drawing upon CODI's parent-level financing structure and success in
growing niche market leaders, we will enhance our ability to
implement strategic growth initiatives aimed at further
strengthening our global leadership in the specialty and rare earth
magnetic industry for the benefit of our stakeholders."
Additional information on the acquisition will be available on
the Company's current report on Form 8-K that will be filed with
the Securities and Exchange Commission today.
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 nine 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 manufacture of engineered magnetic solutions for a wide
range of specialty applications and end-markets (Arnold Magnetic
Technologies, www.arnoldmagnetics.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