Compass Diversified Holdings
) recently entered into an agreement to acquire Clean Earth
Holdings Inc for $243 million. Expected to close by the end of this
month, the announcement seemed to cheer investors' sentiment
leading to a marginal increase in share price to $17.55 as on
Clean Earth Holdings is a leading provider of essential and
cost-effective land-fill avoidance solutions. This deal will likely
strengthen Compass Diversified's position in the market and unlock
additional values by generating incremental revenue stream.
Post acquisition, Compass Diversified is likely to retain Clean
Earth's experienced management team and utilise its strong cash
flow and attractive growth potential. Clean Earth has a strong
environmental and safety track record with a premier reputation in
the specialty waste industry. Upon closure, Compass Diversified
intends to leverage its market leadership and scalable
infrastructure to gain additional mileage.
Compass Diversified aims to strategically expand through both
organic and inorganic growth. The acquisition takes the total
number of businesses owned by the company to eight, apart from a
41% ownership interest in Fox Factory Holding Corp. (
). CODI expects Clean Earth to contribute approximately 28-32 cents
per share to its cash flow accretion on a yearly basis.
Compass Diversified is a leading owner of well-known North American
middle market businesses with each of its current subsidiaries
being leaders in the niche market.
Compass Diversified currently holds a Zacks Rank #2 (Buy). Other
stocks that look promising and are worth a look include Federal
Signal Corp. (
) and ITT Corp. (
), both carrying a Zacks Rank #2 (Buy).
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COMPASS DIVERSF (CODI): Free Stock Analysis
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