Compass Diversified Holdings helps niche companies navigate their way toward profitability. The holding company owns controlling stakes in and manages promising middle-market businesses throughout North America. Its strategy is two fold: help its portfolio companies grow and increase their profits, and increase the size of its own portfolio. Compass invests in niche businesses across a variety of industries, including suspension products maker Fox Factory, furniture maker AFM Holding Corp., and home and gun safes maker Liberty Safe and Security Products. Its arsenal includes helping it portfolio holdings make strategic acquisitions, enter new business arenas, or improve operations to increase profitability.
At the end of 2011 the firm had eight businesses in its portfolio. In addition to Fox, AFM, and Liberty Safe, Compass owned stakes in: CamelBak, a maker of wearable water bottles; ERGObaby, which makes wearable baby products and accessories; Tridien Medical (formerly Anodyne Medical Device), a maker of specialty therapeutic support surfaces; and circuit board maker Advanced Circuits. In 2012 Compass sold promotional products maker HALO Holding to Candellight Investment for $76.5 million. The transaction helped Compass increase its liquidity.
In 2012 the investment firm acquired Arnold Magnetic Technologies, a manufacturer of permanent magnets and precision magnetic assemblies.
When evaluating acquisition candidates Compass looks for established, US-based companies with significant market share in a niche industry with a low risk of technological or product obsolescence. Other investment criteria include a proven management team, diversified customer and supplier base, and a minimum EBITDA (earnings before interest, taxes, depreciation and amortization) of $8 million.
CGI Magyar Holdings owns about 16% of the company's shares. – less