Compass Diversified Holdings will not reinvest proceeds from its recent sales of Fox Factory stock into another outdoor lifestyle brand. The company announced Thursday that its next acquisition will be an environmental services company.
Compass Diversified announced it had entered into an agreement to acquire Clean Earth Holdings Inc. The acquisition is expected to close by the end of August, subject to customary closing conditions.
Headquartered in Hatboro, PA, Clean Earth provides environmental services for a variety of contaminated materials including soils, dredged material, hazardous waste and drill cuttings. The company analyzes, treats, documents and recycles waste streams generated in multiple end-markets such as power, construction, oil and gas, infrastructure, industrial and dredging.
The purchase price for Clean Earth will be based on a total enterprise value of $243 million and will also include cash and working capital adjustments upon closing. Clean Earth generated approximately $32 million of EBITDA for the last twelve months ending June 30, 2014. In addition, Clean Earth incurs between approximately $4 million and $5 million in annual maintenance capital expenditures.
“This attractive platform acquisition, which will increase the current number of businesses we own to eight upon closing, in addition to a 41 percent ownership interest in FOX, is expected to provide approximately 28 to 32 cents per share of cash flow accretion on a full year basis,” said Alan Offenberg, CEO of Compass Diversified Holdings. “Going forward, we remain well capitalized to take advantage of additional acquisitions utilizing our disciplined approach to valuation and diligence as we have consistently done in the past.”
Compass Diversified’s current holdings include controlling stakes in: CamelBak, whicy makes hydration products; Ergobaby, which makes infant carriers; and Liberty Safe, which makes gun safes.