Compass Diversified Holdings has acquired Liberty Safe and Security Products, Inc., the maker of home and gun safes in North America. CODI paid approximately $70 million to purchase Liberty, funding the acquisition with drawings under CODI’s revolving credit facility. In addition, CODI paid approximately $1.5 million in expenses associated with this transaction. CODI’s initial ownership position in the company is approximately 96%.
From its over 200,000 square foot manufacturing facility in Payson, Utah, Liberty Safe and Security Products produces a wide range of home and gun safe models in a broad assortment of sizes, features and styles. Products are marketed under the Liberty brand, as well as a portfolio of licensed and private label brands, including Remington, Cabela’s and John Deere. The company’s products are the market share leader and are sold in various sporting goods, farm and fleet, and home improvement retailers. Liberty also has the largest independent dealer network in the industry. For the year ended December 31, 2009, Liberty reported revenue of $73.8 million.
Commenting on the acquisition, Joe Massoud, CEO of Compass Diversified Holdings, said, “Liberty represents an ideal addition to our family of niche leading businesses. The company possesses those important characteristics that we seek in all of our businesses, including strong industry positioning, experienced management, stable cash flows and favorable macro trends. Demand among avid shooting sports enthusiasts remains healthy and we expect to benefit from increasing awareness of the need for safe storage of firearms. In addition, we believe that there is a largely untapped market for premium home safes that represents an important growth avenue for the company going forward. We are enthusiastic about the prospect of working with the Liberty management team.”
Massoud added, “We expect the acquisition of Liberty to immediately provide our owners with ten to fifteen cents per share of cash flow accretion on a full year basis. Furthermore, we are optimistic that in the current environment, we will have additional opportunities to acquire businesses attractively on behalf of our shareholders.”
Jeff Talley, President and Chief Executive Officer of Liberty, will continue to serve in the same capacity at the company. Mr. Talley commented, “We are excited about Compass’s acquisition of Liberty. We look forward to continuing our long history of providing outstanding products to our customers. In addition, we expect to work with the Compass team to assess and implement a range of marketing and operating initiatives designed to further enhance cash flow.”
Compass Diversified Holdings businesses include American Furniture Manufacturing, Anodyne Medical Device, Advanced Circuits, Fox Racing Shox, Halo Lee Wayne, and Staffmark.
