Profile: Compass Diversified Holdings (CODI.K)
10 Mar 2014
Compass Diversified Holdings (the Trust), incorporated on November 18, 2005, acquires controlling interests in and actively manage businesses that it believe operate in industries with long-term macroeconomic growth opportunities, and that have positive and stable cash flows, face minimal threats of technological or competitive obsolescence and have management teams largely in place. The Company’s businesses include Advanced Circuits , American Furniture, Arnold , CamelBak , Ergobaby , Fox, Liberty Safe and Tridien.
The Company’s public structure provides investors with an opportunity to participate in the ownership and growth of companies which have historically been owned by private equity firms, wealthy individuals or families. Through the acquisition of a diversified group of businesses with these characteristics, it also offer investors an opportunity to diversify their own portfolio risk while participating in the ongoing cash flows of those businesses through the receipt of distributions.
Advanced Circuits is a provider of prototype, quick-turn and production rigid PCBs, throughout the United States. Advanced Circuits also provides its customers with assembly services in order to meet its customers’ complete PCB needs. The prototype and quick-turn portions of the PCB industry are characterized by customers requiring high levels of responsiveness, technical support and timely delivery. Due to the critical roles that PCBs play in the research and development process of electronics, customers often place more emphasis on the turnaround time and customized PCB than on the price. Advanced Circuits meets this market need by manufacturing and delivering custom PCBs in as little as 24 hours, providing customers with over 98% error-free production and real-time customer service and product tracking 24 hours per day. Advanced Circuits’ success is demonstrated by its broad base of over 11,000 customers with which it does business throughout the year.
The PCB industry, which consists of both global PCB manufacturers and small regional PCB manufacturers, is a vital component to all electronic equipment supply chains, as PCBs serve as the foundation for virtually all electronic products, including cellular telephones, appliances, personal computers, routers, switches and network servers. PCBs are used by manufacturers of these types of electronic products, as well as by persons and teams engaged in research and development of new types of equipment and technologies. Advanced Circuits uses the brand names: FreeDFM.com, 4pcb.com, 4PCB.com, 33each.com, barebonespcb.com and Advanced Circuits. These trade names have brand equity and are material to Advanced Circuits’ business. A PCB is consists of layers of laminate and contains patterns of electrical circuitry to connect electronic components. Advanced Circuits typically manufactures 2 to 20 layer PCBs, and has the capability to manufacture up even higher layer PCBs.
The Company competes with TTM Technologies, Inc. and Viasystems Group, Inc.
American Furniture is a manufacturer of upholstered furniture sold to large-scale furniture distributors and retailers. American Furniture operates almost exclusively in the promotional upholstered segment of the furniture industry which is characterized by affordable prices, standard designs and immediate availability to retail consumers. American Furniture’s products are adapted from established designs in the following categories: stationary, motion, recliner and other related products including accent tables and rugs. American Furniture’s products are manufactured from common components and offer select fabric options, providing manufacturing efficiency and resulting in limited design risk. The Company manufactures two basic categories of promotional upholstered products, stationary and motion. Stationary products include sofas, loveseats and sectionals. Motion products include single rocking recliner chairs, sofas with reclining end seats, loveseats with seats that rock together or separately and reclining sectionals with storage compartments. Its products utilize common components and frames with limited fabric options, allowing AFM to reproduce established styles at value prices. It can re-engineer a new design, create a prototype and begin to solicit customer feedback within two weeks. AFM carefully controls its product line such that new styles typically replace older designs.
It utilizes an assembly-line manufacturing process with a four day production cycle divided into four functions, cutting, sewing, backfill and upholstery. Employees are specialized by function and are compensated on a piece-rate basis. The limited number of styles and designs minimizes scheduling and line changes and each function is simplified by the use of common components. AFM uses one standard seat spring, one standard back spring and one standard cushion in each category of upholstery. It delivers the majority of its products through third-party freight service providers. Freight costs are generally paid by the customer, including fuel surcharges.
The Company competes with United Furniture Industries, Albany Industries and Hughes Furniture, Ashley Furniture and Affordable Furniture.
Arnold Magnetic Technologies Corporation is a manufacturer of engineered, application specific magnet solutions. Arnold manufactures a wide range of permanent magnets and precision magnetic assemblies with facilities in the United States, the United Kingdom, Switzerland and China. Arnold has hundreds of customers in its primary markets including aerospace and defense, consumer, industrial, medical, automotive as well as oil and gas exploration. Arnold believes, technically advanced U.S. manufacturer of engineered magnets. Arnold is one of two domestic producers to design, engineer and manufacture rare earth magnetic solutions. Arnold operates a 70,000 sq. ft. manufacturing assembly and distribution facility in Rochester, New York with nine additional facilities worldwide in countries including the UK, Switzerland and China.
Arnold serves customers and generates revenues via three business units: Permanent Magnet and Assemblies Group(PMAG), which provides high performance magnets and assemblies for precision motors/generators, Hall Effect sensor and beam focusing applications, It also manufactures assemblies for the reprographic industry used in printing and copying systems; Rolled Products, which provides ultra thin gauge metal strip and foil products utilizing magnetic and non-magnetic alloys, and Flexmag, provides flexible bonded magnets for specialty advertising, industrial and medical applications.
The Company competes with Thomas & Skinner , Magnum Magnetics, Electron Energy and Vacuumschmelze Gruner.
CamelBak is a diversified hydration and personal protection platform, offering Products for outdoor, recreation and military applications. CamelBak offers a broad range of recreational / military hydration packs, reusable water bottles, specialized military gloves and performance accessories. CamelBak is also the hydration pack of choice for the warfighter .It has developed a reputation as the preferred supplier for the hydration needs of the demanding athletes and warfighters. CamelBak focuses on offering high quality, industry hydration and performance equipment. The company’s products fall into four key categories.
CamelBak’s heritage and legacy is in hydration packs and the Company maintains the broadest and deepest line of packs in the industry. CamelBak’s core hydration product consists primarily of an easily cleaned and filled polyurethane reservoir, a connecting tube and a self-sealing mouthpiece, or bite-valve, which facilitates simple and intuitive drinking. The CamelBak hydration system allows users to conveniently carry one to three liters of water, which can be easily accessed without interruption of the user’s task or activity. The system is often sold as an integrated backpack or waist-pack, which is uniquely designed for a specific use, such as biking, running or military applications.
The company introduced the Better Bottle, incorporated a number of features that quickly established it as a best-in-class hydration solution. These features include: the patented spill-proof Bite Valve, the first insulated stainless steel water bottle and the first all BPA-free line of plastic water bottles. It developed a line for children, which included bite valves that have to be removed from the inside of the bottle to prevent choking. The company also released the Podium insulated and non-insulated line, which includes features such as the patented Jet Valve. The company’s bottle offering Groove, which provides users the ability to filter water in any place at any time through its integrated straw assembly. Users simply fill the bottle with tap water, screw the cap on and start sipping. The integrated plant-based carbon filter reduces chlorine taste and odors found in tap water thus improving taste and eliminating the desire to purchase disposable bottles of water.
The gloves are highly-technical and difficult to produce, with some styles requiring 44 individual pieces for the assembly of the final product. CamelBak gloves are exclusively a Government / Military product, as their technical characteristics exceed that which a non-military user would desire. The reduction in Glove sales over the past two years is consistent with the reduction of deployed troops.
CamelBak offers various accessories to complement its hydration systems. Accessories are available for each product line and include items that are made to enhance hydration performance and others for maintenance or replacement parts. In addition to recreational accessories, the Company offers a specialized line associated with its military products. These accessories help enhance the performance of military products by adding resistance to chemical and biological agents or allowing connection to standard issue gas masks. For example, the HydroLink allows warfighters to replace their bite valve with a connector, allowing them to hydrate while wearing their gas mask.
The Company competes with Osprey, The North Face, DaKine, Nalgene, SIGG,Nathan Performance Gear, Polar, Kleen Kanteen, Contigo, Platypus, Hydrapak and Source.
Ergobaby is a premier designer, marketer and distributor of baby wearing products, stroller travel systems and accessories. Ergobaby offers a broad range of wearable baby carriers, stroller travel systems and related products that are sold through more than 650 retailers and web shops in the United States and internationally in about 50 countries. Ergobaby has two main baby carrier product lines: baby carriers and accessories. Ergobaby’s baby carrier design supports a natural sitting position for babies, eliminating compression of the spine and hips that can be caused by unsupported suspension. The baby carrier also balances the baby’s weight to parents ips and shoulders, and alleviates physical stress for the parent. The organic carrier line uses 100% organic cotton from India. Additional accessories are provided to complement the baby carriers.
Ergobaby sells seven primary product lines: the Original, Designer, Organic, Sport, Performance, Travel, and Options carriers and; within each line, Ergobaby offers multiple style variations in carrier category. Ergobaby sells twelve primary product lines: back packs, bibs, changing pads, chest strap, doll carrier, front pouch, hood replacement, Infant Insert, papoose coat, teething pads, waist extension and a weather cover in accessories category. Within each line, Ergobaby offers multiple style variations including color and organic/non-organic fabric.
The Company competes with Chicco, Bugaboo, Maclaren, Baby Trend, Stokke, Quinny Baby and UPPAbaby.
Fox is a branded action sports company that designs, manufactures and markets high-performance suspension products and components for mountain bikes, snowmobiles, motorcycles, all-terrain vehicles (ATVs), and other off-road vehicles. Fox’s products are recognized by manufacturers and consumers as being among the technically advanced suspension products available in the marketplace. Fox’s technical success is demonstrated by its dominance performances by professional athletes utilizing its suspension products. Fox sells to over 175 OEM and over 7,800 Aftermarket customers across its market segments. Fox designs and manufactures suspension products that dissipate the energy and force generated by various ride sport activities. A suspension product allows wheels to move up and down to absorb bumps and shocks while keeping the tires in contact with the ground for better control. Fox’s products use adjustable suspension, progressive spring rates, and low weight combined with structural rigidity. Fox suspension products improve user control for greater performance while maximizing comfort levels.
The Company competes with RockShox , Tenneco Marzocchi S.r.l., Manitou, SR Suntour ,DT Swiss, KYB ,Ohlins Racing AB, Walker Evans Racing, Works Performance Products, Penske Racing Shocks / Custom Axis, Inc., ZF Sachs (ZF Friedrichshafen AG), Walker Evans Racing, ThyssenKrupp Bilstein Suspension GmbH (Bilstein), King Shock Technology, Inc. (King Shock), Icon Vehicle Dynamics, Sway-A-Way, Pro Comp Suspension and Rancho (Tenneco).
Liberty Safe is the premier designer, manufacturer and marketer of home, gun and office safes in North America. From its over 204,000 square foot manufacturing facility, Liberty Safe produces a wide range of home, office and gun safe models in a broad assortment of sizes, features and styles ranging from an entry level product to good, better and best products. Products are marketed under the Liberty Safe brand, as well as a portfolio of licensed and private label brands, including Remington, Cabela’s and John Deere. Liberty Safe’s products are the market share and are sold through an independent dealer network (Dealer sales) in addition to various sporting goods and home improvement retail outlets (Non-Dealer sales or National sales).
Liberty Safe produces 39 home and gun safe models with the varied assortment of sizes, feature upgrades, accessories and styling options in the industry. Liberty Safe’s premium home and gun safe product line covers sizes from 12 cubic feet to 50 cubic feet with smaller sizes available for its personal home safe. Liberty Safe markets its products under Company-owned brands and a portfolio of licensed and private label brands, including Remington, Cabela’s, John Deere and others. Liberty Safe also sells commercial safes, vault doors and a number of accessories and options. The overwhelming majority of revenue is derived from the sales of safes.
The Company competes with Browning, Winchester or RedHead / Bass Pro.
Tridien is a designer and manufacturer of powered and non-powered medical therapeutic support surfaces and patient positioning devices serving the acute care, long-term care and home health care markets. Tridien is one of the designers and manufacturers of specialty therapeutic support surfaces with manufacturing operations in multiple locations to better serve a national customer base. Tridien, together with its subsidiary companies, provides customers the opportunity to source surface technologies from the designer and manufacturer.
Tridien develops products both independently and in partnership with distribution intermediaries. Medical distribution companies then sell or rent the therapeutic support surfaces, sometimes in conjunction with bed frames and accessories to one of three end markets: acute care, long term care and home health care. The level of sophistication largely varies for each product, as some patients require simple foam mattresses (non-powered support surfaces) while others may require electronically controlled, low air loss, lateral rotation, pulmonary therapy or alternating pressure surfaces (powered support surfaces). The design, engineering and manufacturing of all products are completed in-house. Specialty beds, mattress replacements and mattress overlays (i.e. therapeutic surfaces) are the primary products available for pressure relief and pressure reduction to treat and prevent decubitus ulcers. The market for specialty beds and therapeutic surfaces include the acute care centers, long-term care centers, nursing home centers and home healthcare settings. Medical therapeutic surfaces are designed to have preventative and/or therapeutic uses.
The Company competes with Span America
Compass Diversified Holdings
Second Floor, 61 WILTON ROAD
WESTPORT CT 06880