Compass Diversified Holdings acquired Candle Lamp Company, LLC. Oct. 10 for eight times trailing 12 months EBITA in its first acquisition of a consumer brand since divesting control of Fox Holding Corp. earlier this year.
The company, which has done business as SternoCandleLamp since a 2012 merger between the then 119-year-old Sterno and 30-year-old Candle Lamp, produces a line of wick and gel chafing fuels, butane stoves and accessories, liquid and traditional wax candles, catering equipment and lamps. While it earns most its revenues from the food service industry, SternoCandleLamp does offer a line
of consumer products, including Sterno-branded fuel canisters, stoves
and fire starters for tailgating, car camping and other outdoor use.
Headquartered
in Corona, CA, SternoCandleLamp is the leading manufacturer and
marketer of portable food warming fuel and creative table lighting
solutions for the foodservice industry. SternoCandleLamp’s
For over 100 years, the iconic “Sterno” brand has been synonymous with quality canned heat. The heritage of reliability and innovation continues today, as SternoCandleLamp continues to bring to market new products that give foodservice industry professionals greater control over food quality and décor. For the year ended Dec. 31, 2013, SternoCandleLamp reported net revenue of approximately $133.6 million.
The purchase price for SternoCandleLamp of $163 million was based on a total enterprise value of $161.5 million and included approximately $1.7 million of cash and working capital adjustments. SternoCandleLamp generated approximately $20.0 million of EBITDA for the last twelve months ending September 30, 2014.
Acquisition related costs were approximately $2.7 million. CODI funded the acquisition through a draw of $166 million on its revolving credit facility.
On a primary basis, CODI will initially own all of the common equity ownership in SternoCandleLamp. In addition to its equity investment in SternoCandleLamp, CODI provided loans totaling approximately $91.6 million to SternoCandleLamp as part of the transaction.
“With the acquisition of SternoCandleLamp, we have increased the current number of businesses we own to nine in addition to CODI’s 41% ownership interest in Fox Factory Holding Corp,” said Alan Offenberg, CEO of Compass Diversified Holdings. “This platform acquisition, our second in 2014, is expected to provide approximately $0.20 per share of cash flow accretion on a full year basis and, combined with our acquisition of Clean Earth Holdings in August 2014, has significantly strengthened our earnings power. Going forward, we will continue to enter into additional accretive acquisitions of leading businesses aimed at creating long-term shareholder value.”
Don Hinshaw, President & CEO of SternoCandleLamp, will continue to serve in the same capacity at the company.
CODI is a publicly traded company that specializes in acquiring, growing and selling middle market North American companies in a diverse range of industries. In addition to controlling companies that make electronic circuits, magnets, medical devices and furniture, its owns majority stakes of CamelBak Products, ErgoBaby and Liberty Safe and a 41 percent stake in Fox Holding Corp.
