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 enterprise value of the transaction is set at $292.5 million, with adjustments for working capital [2]. - In 2025, Sterno's food service business generated an adjusted EBITDA of approximately $30.3 million [2]. - Post-transaction, CODI expects its senior secured net leverage ratio to fall below 1.0x after repaying outstanding debt [3]. Business Operations - Following the sale, CODI will retain Sterno's home fragrance business, which will continue to operate under the Rimports name [4]. - Rimports is recognized as a leading manufacturer and distributor of home fragrance products [4]. Management Statements - The CEO of CODI emphasized that the transaction is a strategic move to reduce leverage and enhance the company's intrinsic value [5]. - The CEO of Sterno highlighted the brand's rich history and expressed confidence in its future success under Archer [5]. Transaction Timeline - The transaction is subject to customary closing conditions and is expected to close in May 2026 [5]. Advisory Information - Raymond James is serving as the financial advisor to CODI, while Brownstein Hyatt Farber Schreck, LLP is providing legal counsel [6].