Compass Diversified (NYSE: CODI) (“CODI”), an owner of leading
middle market businesses, today announced it has entered into a
definitive agreement (the “Agreement”) to sell its majority owned
subsidiary, Compass AC Holdings, Inc., the parent company of
Advanced Circuits, Inc. (“Advanced Circuits” or “the Company”), to
Tempo Automation, Inc. (“Tempo Automation”), the world's leading
software-accelerated electronics manufacturer. In connection with
the Agreement, Tempo Automation has announced its entry into a
definitive merger agreement for a business combination with ACE
Convergence Acquisition Corp. (“ACE”), a special-purpose
acquisition company focused on the Industrial and Information
Technology sectors. Upon closing of the transaction, the combined
operating entity will be renamed “Tempo Automation Holdings, Inc.”
(“Tempo”), and shares of its common stock are expected to trade on
Nasdaq under the ticker symbol “TMPO.”
Under the terms of the Agreement, CODI and the other selling
shareholders will receive consideration in the amount of $310
million, composed of $240 million in cash and $70 million in Tempo
common stock upon the closing of the transaction, excluding certain
working capital and other adjustments. In addition, CODI and the
other selling shareholders may receive $30 million in additional
Tempo common stock within five years, subject to Tempo stock price
performance. CODI anticipates the proceeds will be used to repay
all or a portion of outstanding revolver borrowings and for general
corporate purposes.
“Advanced Circuits has established itself as an industry leader
in the PCB fabrication and assembly space, and we are tremendously
proud of the growth the company has achieved during our ownership,”
said Elias Sabo, CEO of CODI. “Our unique permanent capital
structure has allowed us the time and flexibility to take a
long-term approach to value creation, consistently investing in
Advanced Circuits’ operations and capabilities. John and Jeff
Yacoub and the rest of the talented management team have been
excellent partners throughout our entire 15-year relationship. We
believe this transaction delivers immediate value to CODI
shareholders while enabling us to participate in the potential
upside of this compelling combination.”
Sabo continued: “We believe in the Tempo team’s vision and in
the long-term benefits of bringing together high-quality companies
in the industry to redefine the customers’ journey from prototype
to production. Together, we believe the combined, publicly-listed
company will be positioned as an industry leader – representing a
new one-stop shop platform for customers who are looking to
innovate and bring new electronic products to market. Leveraging
design and development capabilities, PCB production and assembly
and breakthrough, software-automated PCBA manufacturing, the unique
combination of products and services offers significant potential
for customer acquisition and entrance into new vertical
markets.”
“We are grateful to the CODI team for their support and
partnership over the past 15 years in helping us reach this
exciting milestone,” said John Yacoub, CEO of Advanced Circuits.
“As a part of this new and expanded platform, we believe we can
bolster our leading market position and propel the business into
its next phase of growth, and we are confident it will grant us new
opportunities to serve our customers with the responsiveness,
timely delivery and high-quality custom products they expect from
us.”
The closing of the Advanced Circuits transaction is subject to
customary terms and conditions, including regulatory approval, and
is expected to occur in the first quarter of 2022.
ACE and Tempo Automation today issued a separate press release
announcing their transaction.
Cowen and Company, LLC is acting as financial advisor and Paul
Hastings LLP is acting as legal counsel to CODI.
About Compass Diversified (“CODI”)
CODI owns and manages a diverse set of highly defensible North
American middle market businesses. Each of its current subsidiaries
is a leader in its niche market.
Leveraging its permanent capital base, long-term disciplined
approach and actionable expertise, CODI maintains controlling
ownership interests in each of its subsidiaries, maximizing its
ability to impact long-term cash flow generation and value
creation. CODI 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 its long-term growth and has consistently
generated strong returns through its culture of transparency,
alignment and accountability.
Our ten majority-owned subsidiaries are engaged in the following
lines of business:
- The design and marketing of purpose-built technical apparel and
gear serving a wide range of global customers (5.11);
- The manufacture of quick-turn, small-run and production rigid
printed circuit boards (Advanced Circuits);
- The design and manufacture of custom packaging, insulation and
componentry (Altor Solutions);
- The manufacture of engineered magnetic solutions for a wide
range of specialty applications and end-markets (Arnold Magnetic
Technologies);
- The design and marketing of dialed based fit systems delivering
a scientifically proven performance advantage for athletes (BOA
Technology);
- The design and marketing of wearable baby carriers, strollers
and related products (Ergobaby);
- The design, manufacture, and marketing of high-end,
one-of-a-kind jewelry (Lugano Diamonds);
- The design and manufacture of baseball and softball equipment
and apparel (Marucci Sports);
- The manufacture and marketing of portable food warming systems
used in the foodservice industry, creative indoor and outdoor
lighting, and home fragrance solutions for the consumer markets
(Sterno); and
- The design, manufacture and marketing of airguns, archery
products, optics and related accessories (Velocity Outdoor).
Forward Looking Statements
This press release contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including statements
with regard to the expectations related to the sale of Advanced
Circuits (the “Advanced Circuits Transaction”), the proposed
business combination between Tempo Automation and ACE (the
“Proposed Business Combination”) and the future performance of
combined enterprise. Words such as “believes”, “expects”,
“anticipates”, “intends”, “projects”, “assuming”, 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, (i) the risk that the Advanced
Circuits Transaction may not be completed in a timely manner or at
all, (ii) 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
Advanced Circuits Transaction, (iii) the risk that the Proposed
Business Combination may not be completed in a timely manner or at
all, (iv) the effect of the announcement or pendency of the
Advanced Circuits Transaction and the Proposed Business Combination
on the Company’s or Tempo’s business relationships, performance,
and business generally, (v) risks that the Advanced Circuits
Transaction and the Proposed Business Combination disrupts current
plans of the Company and Tempo and potential difficulties in
Company and Tempo employee retention as a result of the
transactions contemplated by the Advanced Circuits Transaction and
the Proposed Business Combination, (vi) the outcome of any legal
proceedings that may be instituted against Tempo or against ACE
related to the agreement and plan of merger or the Proposed
Business Combination, (vii) the ability to maintain the listing of
ACE’s securities on The Nasdaq Stock Market LLC, (viii) the price
of ACE’s securities may be volatile due to a variety of factors,
including changes in the competitive and highly regulated
industries in which Tempo plans to operate, variations in
performance across competitors, changes in laws and regulations
affecting Tempo’s business and changes in the combined capital
structure, (ix) the ability to implement business plans, forecasts,
and other expectations after the completion of the Advanced
Circuits Transaction and the Proposed Business Combination, and
identify and realize additional opportunities, (x) the risk of
downturns in the highly competitive industry in which the Company
and Tempo operate, (xi) the impact of the global COVID-19 pandemic,
(xii) the enforceability of Tempo’s intellectual property,
including its patents, and the potential infringement on the
intellectual property rights of others, cyber security risks or
potential breaches of data security, (xiii) the ability of Tempo to
protect the intellectual property and confidential information of
its customers, (xiv) the risk of downturns in the highly
competitive additive manufacturing industry, and (xv) other
risks and uncertainties described in the risk factor discussion in
the Form 10-K filed by CODI with the U.S. Securities and Exchange
Commission (the “SEC”) for the year ended December 31, 2020 and
other filings with the SEC and described in ACE’s registration
statement on Form S-1 (File No. 333-239716), which was originally
filed with the SEC on July 6, 2020 (the “Form S-1”), and other
filings by ACE 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.
Additional Information and Where to Find
It
In connection with the Proposed Business
Combination, ACE will file a registration statement on Form S-4
(the “Registration Statement”) with the SEC, which will include a
preliminary proxy statement to be distributed to holders of ACE’s
ordinary shares in connection with ACE’s solicitation of proxies
for the vote by ACE’s shareholders with respect to the Proposed
Business Combination and other matters as described in the
Registration Statement, as well as the prospectus relating to the
offer of securities to be issued to Tempo Automation stockholders
in connection with the Proposed Business Combination. After the
Registration Statement has been filed and declared effective, ACE
will mail a definitive proxy statement, when available, to its
shareholders. The Registration Statement will include information
regarding the persons who may, under SEC rules, be deemed
participants in the solicitation of proxies to ACE’s shareholders
in connection with the Potential Business Combination. ACE will
also file other documents regarding the Proposed Business
Combination with the SEC. Before making any voting decision,
investors and security holders of ACE and Tempo are urged to read
the Registration Statement, the proxy statement/prospectus
contained therein, and all other relevant documents filed or that
will be filed with the SEC in connection with the Proposed Business
Combination as they become available because they will contain
important information about the Proposed Business Combination.
Investors and security holders will be able to
obtain free copies of the proxy statement/prospectus and all other
relevant documents filed or that will be filed with the SEC by ACE
through the website maintained by the SEC at www.sec.gov. In
addition, the documents filed by ACE may be obtained free of charge
from ACE’s website at www.acev.io or by written request to ACE at
ACE Convergence Acquisition Corp., 1013 Centre Road, Suite 403S,
Wilmington, DE 19805.
Participants in
Solicitation
CODI, the Company, Tempo Automation and ACE and
their respective directors and officers may be deemed to be
participants in the solicitation of proxies from ACE’s shareholders
in connection with the Proposed Business Combination. Additional
information regarding the interests of those persons and other
persons who may be deemed participants in the Proposed Business
Combination may be obtained by reading the proxy
statement/prospectus regarding the Proposed Business Combination
when it becomes available. You may obtain free copies of these
documents as described in the preceding paragraph.
Important Information for Investors
This press release shall not constitute a proxy
statement or solicitation of a proxy, consent or authorization with
respect to any securities or in respect of the Proposed Business
Combination. This press release shall also not constitute an offer
to sell or a solicitation of an offer to buy any securities, nor
shall there be any sale of securities in any state or jurisdiction
in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any
such state or jurisdiction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section
10 of the Securities Act of 1933, as amended.
Investor Relations:The IGB Group Leon Berman 212-477-8438
lberman@igbir.com |
Media Contact:Joele Frank, Wilkinson Brimmer KatcherJon Keehner /
Kate Thompson / Lyle Weston212-355-4449 |
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