WESTPORT, Conn., May 9, 2016 /PRNewswire/ -- Compass Diversified Holdings (NYSE: CODI) ("CODI" or the "Company"), an owner of leading middle market businesses, announced that on May 9, 2016 its subsidiary, The ERGObaby Carrier, Inc. ("ERGObaby"), entered into a definitive agreement to acquire New Baby Tula LLC ("Baby Tula") for a purchase price of $73.8 million (excluding working capital and a potential earn-out payment of $8.2 million based on 2017 financial performance). The acquisition is expected to close within the next 45 days, subject to customary closing conditions.
Baby Tula was founded in 2009 and makes premium baby carriers, toddler carriers, slings, blankets and wraps that comfortably and ergonomically support the bond between parent and child. Baby Tula has a strong direct channel presence with growing international distribution relationships. The company sells to retailers and consumers in more than 70 countries worldwide, including the U.S., Canada and Australia. For the fiscal year ended December 31, 2015, Baby Tula reported net revenue of approximately $24.8 million and EBITDA of approximately $13.1 million. CODI expects to fund the purchase price through available cash on its balance sheet and a draw on its revolving credit facility.
Commenting on the transaction, Alan Offenberg, CEO of CODI, said, "We are pleased to once again take advantage of CODI's financial strength to make an accretive and strategic add-on acquisition that will increase value for our shareholders. The addition of Baby Tula will strengthen ERGObaby's already attractive industry positioning through product extension as well as channel and geographic expansion. We remain enthusiastic about ERGObaby's prospects and look forward to working with the company's management team to integrate this premium brand and continue ERGObaby's historically strong growth."
Margaret Hardin, CEO of ERGObaby, stated, "By combining ERGObaby's broad portfolio of carriers with Baby Tula's wrap conversions, slings, blankets, as well as toddler & standard carriers, we believe we are offering babywearing parents the best choices and assortment for their growing families. We are excited to work with the Baby Tula team in achieving our common goal of building a global community of confident parents with smart, ergonomic solutions that enable and encourage bonding between parents and babies."
Ula Tuszewicka, Co-Founder of Baby Tula, stated, "When we first started Baby Tula, Mike Pham and I wanted to build a community of like-minded parents and share our own positive babywearing experiences in a unique and supportive way. We are proud to be joining forces with ERGObaby, a company whose culture and passion for babywearing is similar to our own. We bonded over a common goal of broadening the overall babywearing community by providing more unique babywearing choices to a wide range of parents."
Baby Tula will become a wholly owned subsidiary of ERGObaby and continue to be led by co-founders Ula Tuszewicka and Mike Pham. Each brand will continue to design and manufacture products under their current brand names and operate their businesses from San Diego and Los Angeles, respectively. Margaret Hardin remains the CEO of ERGObaby and its subsidiaries.
About Compass Diversified Holdings ("CODI")
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.
Our eight majority-owned subsidiaries are engaged in the following lines of business:
- The manufacture of quick-turn, small-run and production rigid printed circuit boards (Advanced Circuits);
- The design and manufacture of medical therapeutic support surfaces and other wound treatment devices (Anodyne Medical Device, also doing business and known as Tridien Medical);
- The manufacture of engineered magnetic solutions for a wide range of specialty applications and end-markets (Arnold Magnetic Technologies);
- Environmental services for a variety of contaminated materials including soils, dredged material, hazardous waste and drill cuttings (Clean Earth);
- The design and marketing of wearable baby carriers, strollers and related products (ERGObaby);
- The design and manufacture of premium home and gun safes (Liberty Safe);
- The manufacture and marketing of branded, hemp-based food products (Manitoba Harvest); and
- The manufacture and marketing of portable food warming fuels and creative ambience solutions for the hospitality and consumer markets (Sterno Products).
In addition, we own approximately 33% of the common stock of Fox Factory Holding Corp. ("FOX",Nasdaq: FOXF), a former subsidiary business that completed its initial public offering in August 2013. FOX designs and manufactures high-performance suspension products primarily for mountain bikes, side-by-side vehicles, on-road and off-road vehicles and trucks, all-terrain vehicles, snowmobiles, specialty vehicles and applications, and motorcycles.
To find out more about Compass Diversified Holdings, please visit www.compassdiversifiedholdings.com.
This press release may contain certain forward-looking statements, including statements with regard to the future performance of CODI. Words such as "believes," "expects," "projects," and "future" or similar expressions, are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements, and some of these factors are enumerated in the risk factor discussion in the Form 10-K filed by CODI with the SEC for the year ended December 31, 2015 and other filings with the SEC. Except as required by law, CODI undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Compass Diversified Holdings