Compass Diversified Holdings, which has grown its portfolio of outdoor recreation brands in recent years, sold its majority owned subsidiary, HALO Holding Corporation to Candlelight Investment Holdings, Inc., for a total enterprise value of $76.5 million.
The transaction is subject to customary escrow and working capital provisions. After these adjustments, as well as for an allocation to HALO's non-controlling shareholders and the payment of all of the transaction expenses, CODI received approximately $66.4 million of total proceeds from the sale at closing. This amount was in respect of its debt and equity interests in HALO, which was acquired by CODI on February 28, 2007, and the payment of accrued interest and fees. The proceeds were used to repay outstanding debt under the Company's revolving credit facility. CODI anticipates that its portion of the proceeds from the sale will approximate its book carrying amount for HALO and as a result no significant gain or loss for this transaction will be recorded for the quarter ended June 30, 2012.
“The divestiture of HALO allows us to increase our liquidity and supports our efforts to maximize value for our owners,” stated Alan Offenberg, CEO of Compass Diversified Holdings. “We enjoyed working with HALO over the past five years and wish the company continued success.”
Offenberg added, “Our considerable financial strength bodes well for CODI's ability to take advantage of favorable platform and add-on acquisitions that are accretive, as well as to invest in the growth of our current subsidiaries. We also remain dedicated to providing attractive cash distributions as we have consistently done in the past.”
- CamelBak Products, which designs and manufactures personal hydration products for outdoor, recreation and military use;
- ERGObaby, which designs and markets wearable baby carriers, strollers and related products;
- Fox Racing Shox, which designs, manufactures and markets premium suspension products for mountain bikes and powered off-road vehicles;
- Liberty Safe, which designs and manufactures premium home and gun safes.