Compass Diversified Holdings (NYSE:CODI) and Compass Group (LON:CPG) Diversified Holdings LLC announced on Thursday the amendment and restatement of their at-market issuance sales agreements for preferred and common shares. The modifications, filed on September 4, 2024, aim to enhance the companies' financial flexibility by increasing the availability of shares for potential sale.
Under the new Preferred Sales Agreement with B. Riley Securities, CODI can offer up to $200 million of its 7.250% Series A, 7.875% Series B, and 7.875% Series C Preferred Shares. This agreement supersedes the previous arrangement from March 20, 2024. The Series A, B, and C Preferred Shares have seen an increase in authorized shares by 601,955, 1,977,295, and 2,118,682 respectively.
Additionally, the Common Sales Agreement has been updated, allowing CODI to sell up to $500 million of its common shares through B. Riley Securities, Goldman Sachs & Co (NYSE:GS). LLC, and TD Securities (USA) LLC. This revised agreement replaces the one dated September 7, 2021.
In other recent news, Compass Diversified announced significant developments that could shape its future operations. The company reported an 11% increase in Q2 2024 revenue, mainly driven by its branded consumer vertical, despite a net loss of $13.7 million. However, the company's adjusted EBITDA rose by 27%, indicating a positive financial outlook, even though its industrial vertical experienced a decline.
Compass Diversified is also actively exploring merger and acquisition opportunities, particularly in the healthcare, consumer, and industrial tech sectors. Recently, its subsidiary, Altor Solutions, acquired Lifoam Industries in a cash transaction valued at $137 million. This acquisition is expected to diversify Altor Solutions' revenue streams and provide Compass Diversified with increased exposure to the healthcare industry.
In terms of leadership, Stephen Keller has been appointed as the new Chief Financial Officer, succeeding Ryan J. Faulkingham. This transition led to amendments in the company's governing documents to designate Keller as the "tax matters partner" and "partnership representative" for certain tax purposes.
B.Riley analysts, maintaining their Buy rating for Compass Diversified, noted an increase in full-year subsidiary adjusted EBITDA projections, now expected to be between $480 million and $520 million. Despite a temporary slowdown in the HoneyPot subsidiary, Compass Diversified remains confident in its overall business positioning for a strong 2025.
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