Compass Diversifed Refinances Revolving and Term Debt

Compass Diversified Holdings, a publicly traded investment company that has acquired a string of sporting goods companies in the last decade, has signed a credit agreement for a revolving credit facility totaling $400 million and a term loan facility in the amount of $325 million.

The two facilities, led by Bank of America Merrill Lynch, SunTrust Robinson Humphrey, TD Securities, and U.S. Bank National combine for $725 million in new debt financing and replace the company's previous revolving credit facility and term loan facility.

Under the terms of the five-year revolving credit facility, which is subject to borrowing base restrictions, amounts borrowed bear interest at LIBOR plus a margin ranging from 2.00% to 2.75 percent, based on a leverage ratio defined in the credit agreement. Under the terms of the seven-year term loan facility, amounts borrowed bear interest at LIBOR plus a margin of 3.25 percent. The term loan facility requires quarterly payments of approximately $0.81 million, with a final payment of the outstanding principal balance due June 2021. 

The company utilized approximately $280 million of the proceeds from the term debt facility to refinance existing term loan indebtedness under its previous credit agreement. As a result, there are no initial borrowings outstanding under the revolving credit facility at closing. Compass Diversified expects to utilize the remaining proceeds from the issuance of the term loan and future borrowings under the revolving credit facility to fund future expansion opportunities at its existing subsidiary companies, pursue new platform acquisition opportunities and provide for working capital and general corporate uses.

"We are very pleased to have completed this debt financing, which provides multiple benefits for our company," said Alan Offenberg, CODI's Chief Executive Officer. "It allows us to refinance our existing debt and extend our maturities to June 2019, in the case of our revolver, and to June 2021 for the new term loan. Second, it ensures attractive debt terms and pricing over the next several years. Third, the financing expands our overall debt capacity and further enhances our ability to continue to aggressively pursue organic and acquisition-related growth opportunities. Finally, we diversified our banking relationships by adding Bank of America Merrill Lynch to our lending group.  We appreciate the support of all the financial institutions who participated in this transaction, which demonstrates their confidence in CODI's future prospects."

CODI buys controlling intests in middle market companies that with leading market sahre in their niches and provides them with both debt and equity capital. It's sporting goods holdings include the CamelBak (hydration products),  Fox (suspension products for mountain bikes and motorsports, Ergobaby (wearable child carriers) and Liberty Safe (gun safes.)

By press release


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