Compass-owned Sterno acquires Northern International for $50 mln

Sterno Products LLC, a subsidiary of Compass Diversified Holdings (NYSE: CODI), has acquired Northern International Inc, a Coquitlam, B.C.-based provider of flameless candles and outdoor lighting products for the retail segment. Sterno paid $50 million for the company, including a $2.5 million earn-out payable over two years. Sterno said the deal strengthens its position in the food service lighting segment, and enhances Northern International’s ability to grow. CODI, which holds a number of mid-market businesses, is an affiliate of The Compass Group, a U.S. private equity firm. Last year, CODI bought Winnipeg’s Manitoba Harvest Hemp Foods for $132.5 million.


Compass Diversified Holdings Subsidiary, Sterno Products, Acquires Northern International

Accretive Add-on Acquisition Expands Sterno Products’ Business with Complimentary Product Line

08:30 ET from Compass Diversified Holdings

WESTPORT, Conn., Jan. 25, 2016 /PRNewswire/ — Compass Diversified Holdings (NYSE: CODI) (“CODI” or the “Company”), an owner of leading middle market businesses, announced today that its subsidiary, Sterno Products, LLC (“Sterno Products”), has acquired Northern International, Inc. (“Northern International”) for a purchase price of C$50 million (including a C$2.5 million earn-out payable over two years, but excluding working capital and certain other adjustments).

Northern International is the industry leader in flameless candles and outdoor lighting products for the retail segment. Northern International has been at the forefront of LED lighting product development, and continues to lead the industry with the Candle Impressions and Paradise brands. Sterno Products’ acquisition of Northern International strengthens its current position in the foodservice lighting segment by providing ambience solutions for every situation, and expands Northern International’s ability to grow in North America and internationally. For the trailing twelve months ended December 31, 2015, Northern International reported net revenue of approximately C$118 million and EBITDA of approximately C$7 million. CODI funded the purchase price through available cash on its balance sheet.

Commenting on the transaction, Alan Offenberg, CEO of CODI, said, “Since acquiring Sterno Products a little over a year ago, the company has continued to build upon its leadership position and the strength of the iconic ‘Sterno’ brand. We are pleased to make this accretive add-on acquisition of Northern International as it is consistent with Sterno Products’ recent name change and its focus on expanding the product line into complementary categories and channels. Going forward, we will continue to pursue opportunities to grow our subsidiaries by making attractive add-on acquisitions as well as platform acquisitions that create long-term shareholder value.”

“The addition of the Northern International team to the Sterno Products team is an exciting event for us as we have complimentary product lines, common beliefs in high quality products and services, and a passion to innovate,” said Don Hinshaw, President and CEO of Sterno Products. “Together, these two companies will provide a broad portfolio of industry leading products for the foodservice and retail markets.”

About Compass Diversified Holdings
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 industries (Sterno Products).

In addition, we own approximately 41% 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.

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, 2014 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.

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