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CODI buys Lugano

Compass Diversified has acquired Newport Beach, California-based Lugano Diamonds & Jewelry Inc, a jewelry maker.

Compass Diversified has acquired Newport Beach, California-based Lugano Diamonds & Jewelry Inc, a jewelry maker. The enterprise value of the deal is $256 million.

PRESS RELEASE

WESTPORT, Conn., Sept. 07, 2021 (GLOBE NEWSWIRE) — Compass Diversified (NYSE: CODI) (“CODI”), an owner of leading middle market businesses, today announced it has acquired Lugano Diamonds & Jewelry, Inc. (“Lugano” or the “Company”), a designer, manufacturer and marketer of high-end, one-of-a-kind jewelry, for an enterprise value of $256 million (excluding working capital and certain other adjustments upon closing).

Lugano will continue to be led by its current leadership team, and existing owners and management will retain a significant minority stake in the Company.

Based in Newport Beach, California and founded in 2004, Lugano makes one-of-a-kind jewelry for some of the world’s most discerning clientele. In addition to its product offerings, Lugano frequently partners with local, influential organizations to host and sponsor more than 100 equestrian, social and philanthropic events throughout the year. With a unique product catalogue, deep ties to its local communities and its intimate, salon-based sales model, Lugano builds long-lasting connections with its clients that have allowed it to achieve consistent growth for over 15 years.

“We are excited to bring a growing, luxury goods brand like Lugano to the CODI portfolio of niche-branded consumer subsidiaries,” said Elias Sabo, CEO of CODI. “Lugano’s deep commitment to product design and authentic connection with its target clientele differentiates it from its competitors. We believe that Lugano, as a trusted jewelry advisor offering a rare combination of exclusivity and service, has a sustainable business model capable of generating significant revenues and growth in both the near- and long-term.”

Mr. Sabo continued: “From our perspective, Lugano is ideally positioned to benefit from the resources and access to capital that CODI will provide and build on the Company’s vision and capabilities to become the next major jewelry brand. The Company has demonstrated impressive growth, particularly over the past several years, and is in the process of expanding its talented team. CODI intends to support further growth as Lugano invests in its merchandising strategy, including continuing its retail rollout and expanding its event-driven marketing efforts. We look forward to partnering with the Lugano team to achieve new levels of success for the business in order to deliver value for our shareholders.”

“This moment marks the culmination of years of work from the entire Lugano team, and we are incredibly proud to partner with CODI for the next phase of our growth,” said Moti Ferder, Co-founder and CEO of Lugano. “For over a decade we have sought to deliver one-of-a-kind jewelry through special, curated experiences that stand apart from mainstream jewelry buying experiences. With this dedication to high-quality and authentic connections with our consumers, we have built a loyal, long-term consumer base, and we expect CODI’s support will provide us the resources to introduce more clients to Lugano’s model. Together, we are poised to transform the high-end jewelry retail space for the benefit of our valued clients.”

Gibson, Dunn & Crutcher LLP acted as legal counsel to CODI. Holland & Knight LLP acted as legal advisor to Lugano.

Additional information on the acquisition will be available in CODI’s current report on Form 8-K that will be filed with the Securities and Exchange Commission (“SEC”).

About Lugano Diamonds & Jewelry, Inc
Founded in 2004 and headquartered in Newport Beach, California, Lugano is a designer, manufacturer and marketer of high-end, one-of-a-kind jewelry. Lugano conducts sales of its exclusive merchandise via four retail salons in Newport Beach, Aspen, Palm Beach and Ocala, as well as via pop-up showrooms at Lugano-hosted exclusive events. These salons offer an intimate sales experience where clients can schedule private, no-pressure appointments to view, try on and discuss jewelry. Lugano-sponsored events provide an opportunity for existing or new clients to network among like-minded individuals and to bond over common interests in fine arts, charity and sporting activities.

About Compass Diversified (“CODI”)
CODI owns and manages a diverse set of highly defensible North American middle market businesses. Each of its current subsidiaries is a leader in its niche market.
Leveraging its permanent capital base, long-term disciplined approach and actionable expertise, CODI maintains controlling ownership interests in each of its subsidiaries, maximizing its ability to impact long-term cash flow generation and value creation. CODI 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 its long-term growth and has consistently generated strong returns through its culture of transparency, alignment and accountability.