CODI to sell Clean Earth for about $625 mln


Compass Diversified Holdings, an owner of middle-market businesses has agreed to sell Clean Earth to Harsco Corporation for about $625 million in cash. The deal is expected to close within the next few months. Moelis & Company LLC and Houlihan Lokey provided financial advice to CODI on the deal with Squire Patton Boggs (US) LLP providing legal counsel. Clean Earth is a specialty waste company.

PRESS RELEASE

WESTPORT, Conn., May 09, 2019 (GLOBE NEWSWIRE) — Compass Diversified Holdings (NYSE: CODI), an owner of leading middle market businesses, announced today that Compass Group Diversified Holdings LLC (together with Compass Diversified Holdings, “CODI” or the Company”) has entered into a definitive agreement (the “Agreement”) to sell its majority owned subsidiary, CEHI Acquisition Corporation, the parent company of Clean Earth, Inc. (“Clean Earth”), to a wholly-owned subsidiary of Harsco Corporation (NYSE: HSC). Under the terms of the Agreement, Clean Earth will be sold to Harsco Corporation for approximately $625 million in cash. The closing of this transaction is subject to customary terms and conditions, including regulatory approval, and is expected to occur within the next few months.

The Company expects to realize a gain on the sale of Clean Earth of approximately $200 million and intends to use the net proceeds to repay the remaining outstanding debt under the Company’s revolving credit facility and for general corporate purposes.

Commenting on the transaction, Elias Sabo, CEO of Compass Diversified Holdings, stated, “We began our partnership with Clean Earth over four years ago and worked closely with its strong management team to achieve significant growth. Specifically, our success capitalizing on organic growth opportunities and completing a number of compelling add-on acquisitions enabled Clean Earth to meaningfully expand its geographic footprint, processing capabilities and extensive service offerings, allowing the company to achieve strong revenue and cash flow growth. We thank Chris Dods, Bernie Guerin and the entire Clean Earth management team for all of their hard work and dedication in realizing this extremely favorable outcome and wish them continued success in the future.”

Chris Dods, CEO of Clean Earth, stated, “CODI has been an ideal partner, providing hands-on support, outstanding guidance and growth capital to enable Clean Earth to best take advantage of attractive opportunities. I would like to thank CODI for their patient approach and commitment to invest in our business, driving growth and further strengthening Clean Earth’s brand, industry leadership and financial performance. The momentum that they helped create will provide us with a strong platform for the future.”

Mr. Sabo concluded, “The Clean Earth sale is our second opportunistic divestiture of 2019 and once again demonstrates the advantages of CODI’s investment strategy, drawing on our permanent capital and management resources to strengthen our subsidiaries and unlock substantial value.

Following the closing of this transaction, we expect to realize a gain on sale of approximately $200 million, increasing total gains to shareholders to over $1 billion since our IPO, and intend to use sale proceeds to pay down debt and strengthen our balance sheet. Going forward, we will continue to reinvest in our leading industrial and branded consumer subsidiaries, while taking advantage of additional platform and add-on acquisition opportunities, as well as pursing divestitures that increase shareholder value. Providing shareholders consistent and sizeable cash distributions also continues to be a priority and based on the cashflows we anticipate generating from our remaining leading subsidiaries, we are well positioned to continue to distribute $1.44 per share on an annual basis.”

Moelis & Company LLC and Houlihan Lokey acted as financial advisors to CODI in connection with the transaction. Squire Patton Boggs (US) LLP acted as legal counsel to CODI.

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.

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