Compass Diversified Holdings Inc. (NYSE:CODI), which agreed this month to acquire 5.11 Tactical for $400 million, raised approximately $63 million through Fox Factory Holding Corp. (Nasdaq:FOXF) Aug. 12 secondary offering of common stock.
CODI sold a total of 3.5 million shares of Fox common stock at $18 a share to underwriter Merrill Lynch, Pierce, Fenner & Smith Inc. in a transaction that reduced CODI’s stake in Fox Factory from approximately 33 percent to 23 percent, or 8,608,718, of its common outstanding shares.
Merrill Lynch also bought an additional 525,000 share of FOXF shares from Fox Factory Founder Robert C. Fox, who remains FOXF’s fifth largest shareholder with 6.1 percent of the company’s common outstanding shares. Fox Factory makes high-performance suspension systems for mountain bikes and off road vehicles and owns the Easton/RaceFace bicycle components brands.
“By capitalizing on a compelling opportunity to monetize a portion of our interest in Fox, we have further strengthened our financial position for capitalizing on attractive acquisition opportunities,” said CODI’s CEO Alan Offenberg. “Including our Fox secondary sales and past opportunistic sales of subsidiaries, we have now realized gains for our shareholders of over $575 million. We remain a significant shareholder of Fox and continue to be excited about the company’s growth prospects.”
CODI owns and manages a diverse family of established North American middle market businesses. Each of its current subsidiaries is a leader in its niche market.
CODI maintains controlling ownership interests in each of its subsidiaries in order to maximize its ability to impact long-term cash flow generation and value. The company 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 the long-term growth of the company and to make cash distributions to its shareholders.
