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Compass Diversified Holdings (CODI)

Compass Diversified Holdings (CODI). By: Christian Gabis. A Unique Structure. Part Private Equity (PE) Part Business Development Company (BDC) Compass Management Group. What They Do. Buy PROFITABLE Businesses Work With Management Increase Cash Flows Distribute Cash Flows (CAD)

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Compass Diversified Holdings (CODI)

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  1. Compass Diversified Holdings (CODI) By: Christian Gabis

  2. A Unique Structure • Part Private Equity (PE) • Part Business Development Company (BDC) • Compass Management Group

  3. What They Do • Buy PROFITABLE Businesses • Work With Management • Increase Cash Flows • Distribute Cash Flows (CAD) to shareholders

  4. Companies

  5. Business Selection • Management feels that each business has a strong competitive advantage or as they say “A reason to exist”. • Must be profitable ($8 million EBITDA)

  6. Management Harvard Graduate Joseph Massoud Worked in this same line of business in the 90s Compounded IRR of 39% Large insider ownership….and they are still buying!

  7. History • Have Sold and bought several businesses • Sold Silvue for $70 million (Gain of about $37 million) • Sold Aeroglide for $85 million (Gain of about$32 million) • Sold Crossman for $110 million (Gain of about $28 million) • Net Gain of over $100 million

  8. Financial Info. • $340 million untapped credit revolver • $89 million in cash • $153.5 million in long term debt (2012) • Keeping the powder dry

  9. Valuation

  10. What is important here…. • They want to stay small • Unheard of level of detail in business segments • Upfront and honest • This thing is CHEAP!

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