Compass Diversified Holdings has agreed to sell coating systems maker Silvue Technologies Group Inc. to Mitsui Chemicals Inc. The deal values Silvue at approximately $95 million, with Compass to receive around $70 million.
Compass Diversified Holdings (Nasdaq: CODI) announced today that its wholly owned subsidiary, Compass Group Diversified Holdings LLC (the “Company”) has entered into a definitive agreement for the sale of its majority owned subsidiary, Silvue Technologies Group, Inc. (“Silvue”), to Mitsui Chemicals, Inc. for a total enterprise value of approximately $95 million.
Upon the closing of the transaction, it is anticipated that the Company will receive approximately $70 million of the total enterprise value, after payment to minority shareholders and payment of all transaction expenses, in respect of its debt and equity interests in Silvue. Proceeds primarily will be used to repay debt under the Company's credit facility. Availability under this credit facility enables the Company to pursue additional platform and add-on acquisitions and provides working capital capacity for the Company and its subsidiaries.
Silvue was acquired on May 16, 2006, utilizing proceeds from CODI's initial public offering. The transaction is subject to satisfaction of the closing conditions set forth in the stock purchase agreement. Upon the closing of the transaction, it is anticipated that the divestiture will create a gain of between $37.5 million and $40.0 million.
With respect to the transaction, I. Joseph Massoud, CODI's CEO, said, “We are extremely pleased to announce the sale of our Silvue business at a price that is reflective of the exceptional quality of its assets, management and staff. We consider the opportunity to divest our interest in Silvue at this value to be extremely attractive for our shareholders, and are excited to have achieved a substantial gain on our ownership of this business. We are grateful for the opportunity to have worked with Silvue and its employees over the years and wish them continued success under their new ownership.
“In February of 2007, we sold our subsidiary, Crosman Acquisition Corporation. As with the sale of Crosman, it is expected that the sale of Silvue will result in the recognition of a substantial gain to CODI shareholders. We believe these two transactions are evidence of the substantial embedded value that exists within CODI's family of subsidiary businesses.”
Additional information on the sale transaction will be available on the Company's Form 8-K that will be filed with the Securities and Exchange Commission on or before May 12, 2008. It is expected that the transaction will close on or before September 19, 2008. Investment bank, B. Riley & Co., LLC acted as exclusive financial advisors and Paul, Hastings, Janofsky & Walker LLP provided legal counsel to CODI.
About Compass Diversified Holdings (“CODI”)
CODI was formed to acquire and manage a group of middle market businesses that are headquartered in
Upon acquisition, CODI works with the executive teams of its subsidiary companies to identify and capitalize on opportunities to grow those companies' earnings and cash flows. These cash flows support distributions to CODI shareholders, which are intended to be steady and growing over the long term.