Compass Diversified Announces Definitive Agreement to Sell Sterno's Food Service Business for $292.5 Million and Accelerate Deleveraging

Core Viewpoint - Compass Diversified (CODI) has entered into a definitive agreement to sell the food service business of its subsidiary, SternoCandleLamp Holdings, Inc. (Sterno), to Archer Foodservice Partners for an enterprise value of $292.5 million, aiming to reduce leverage and improve financial stability [1][2][5]. Financial Details - The sale of Sterno's food service business is valued at $292.5 million, with an expected subsidiary adjusted EBITDA of approximately $30.3 million for 2025 [2]. - Post-transaction, CODI anticipates its senior secured net leverage ratio to fall below 1.0x, which will help avoid excess leverage fees beyond June 30, 2026 [3]. Business Operations - Following the sale, CODI will retain Sterno's home fragrance business, which operates under the Rimports name, a manufacturer and distributor of home fragrance products [4]. - The transaction is expected to close in May 2026, subject to customary closing conditions and regulatory approvals [5]. Management Commentary - CODI's CEO, Elias Sabo, emphasized the importance of this transaction in reducing leverage and aligning market price with intrinsic value, while expressing gratitude to Sterno's employees for their contributions [5]. - Sterno's CEO, Geoffrey J. Feil, highlighted the brand's rich history and expressed confidence in its future success under Archer's ownership [5].