Compass Diversified (CODI): History, Ownership, Mission, How It Works & Makes Money

Ever wondered how a company can juggle diverse businesses, from baby carriers to home safes, all under one roof? Compass Diversified (CODI), a publicly-traded holding company (NYSE: CODI), does just that, acquiring and managing middle-market businesses. With a market cap of $1.25 billion and revenue of $2.20 billion, how does CODI maintain a balanced portfolio and generate value for its shareholders? Keep reading to find out how they strategically manage companies with enterprise values between $100 million to $800 million and positive cash flows of at least $15 million per annum.

Compass Diversified (CODI) History

Compass Diversified Founding Timeline

Year established

The company was established in 1998.

Original location

The company is located in Westport, CT.

Founding team members

While specific names of the original founding team members are not readily available in the provided search results, it is known that the company was formed with the intent of acquiring and managing a diverse group of middle-market businesses.

Initial capital/funding

Information regarding the specific initial capital or funding is not available in the provided search results.

Compass Diversified Evolution Milestones

Compass Diversified Transformative Moments

• Strategic Shift to Permanent Capital: The decision to operate as a permanent capital vehicle allowed the company to focus on long-term value creation rather than short-term gains, differentiating it from traditional private equity firms.
• Diversification Strategy: The consistent focus on acquiring businesses across diverse industries, including branded consumer goods and industrial products, has reduced overall risk and provided stability.
• Operational Improvements: Implementing operational improvements and strategic guidance within its subsidiary companies has been crucial in driving revenue and profit growth.
• Active Portfolio Management: The willingness to divest businesses when appropriate, such as the sale of Halo Branded Solutions in 2015, demonstrates a proactive approach to portfolio management and capital allocation.

These transformative moments reflect the company’s strategic evolution and commitment to long-term growth and value creation. You might be interested in Exploring Compass Diversified (CODI) Investor Profile: Who’s Buying and Why?

Compass Diversified (CODI) Ownership Structure

Compass Diversified has a diverse ownership structure, blending institutional, retail, and insider holdings. This mix reflects a broad investor base and varying degrees of stakeholder involvement in the company.

Compass Diversified's Current Status

Compass Diversified (CODI) is a publicly traded company. Its shares are listed on the New York Stock Exchange, allowing anyone to purchase them.

Compass Diversified's Ownership Breakdown

As a publicly traded company, Compass Diversified's ownership is distributed among various shareholders. The following table provides an overview of the company's ownership structure:

Compass Diversified's Leadership

Compass Diversified is guided by a team of experienced leaders who steer the company's strategic direction and operational execution:

• Elias J. Sabo: Chief Executive Officer
• Ryan J. Faulkingham: Chief Financial Officer
• Patrick J. Maciariello: Chief Operating Officer

For more in-depth insights into the investor profile, consider reading Exploring Compass Diversified (CODI) Investor Profile: Who’s Buying and Why?

Compass Diversified (CODI) Mission and Values

Compass Diversified aims to increase long-term shareholder value through acquiring and managing controlling interests in North American middle market businesses. The company emphasizes a culture of integrity, teamwork, and accountability, striving to create a positive impact on its employees, portfolio companies, and communities.

Compass Diversified's Core Purpose

Official mission statement

Compass Diversified's mission statement is not explicitly available in the provided search results. However, based on the company's operational approach, an inferred mission could be described as:

To create long-term value for shareholders by acquiring and actively managing a diverse portfolio of leading middle-market businesses, leveraging our expertise and resources to drive sustainable growth, operational improvements, and financial performance, while maintaining a commitment to integrity, teamwork, and the success of our employees and portfolio companies.

Vision statement

While a specific vision statement isn't provided in the search results, a synthesized vision for Compass Diversified can be articulated as:

To be the premier permanent capital vehicle for middle-market businesses, recognized for our ability to unlock potential, build lasting value, and deliver superior returns to our shareholders, while fostering a culture of excellence and collaboration.

Company slogan/tagline

There is no specific slogan or tagline available in the provided search results for Compass Diversified. For more in-depth information, you can check this link: Mission Statement, Vision, & Core Values of Compass Diversified (CODI).

Compass Diversified (CODI) How It Works

Compass Diversified acquires and manages controlling interests in North American middle-market companies, aiming to increase free cash flow and drive long-term value for its shareholders.

Compass Diversified's Product/Service Portfolio

Compass Diversified operates through its subsidiaries, each offering distinct products and services across various industries. Here's an overview:

Compass Diversified's Operational Framework

Compass Diversified focuses on acquiring and managing businesses with strong market positions and growth potential. Its operational framework involves:

• Acquisition Strategy: CODI targets North American middle-market companies with enterprise values typically between $150 million and $500 million.
• Operational Improvements: Post-acquisition, CODI works with its subsidiaries to implement operational improvements, enhance efficiency, and drive revenue growth.
• Capital Allocation: CODI strategically allocates capital to support organic growth initiatives, acquisitions, and debt reduction within its subsidiaries.
• Decentralized Management: While providing strategic oversight and financial resources, CODI allows its subsidiaries to operate independently, leveraging their existing management teams and industry expertise.
• Cash Flow Generation: A primary goal is to generate strong, sustainable free cash flow from its subsidiaries, which is then used to fund distributions to shareholders and reinvest in the business.

Compass Diversified's Strategic Advantages

Compass Diversified possesses several strategic advantages that contribute to its success:

• Diversified Portfolio: CODI's portfolio spans various industries, reducing its reliance on any single sector and mitigating risk.
• Experienced Management Team: The company's management team has a proven track record of acquiring and managing middle-market businesses.
• Access to Capital: As a publicly traded company, CODI has access to capital markets, providing it with the financial flexibility to pursue acquisitions and growth initiatives.
• Long-Term Investment Horizon: CODI takes a long-term approach to investing, focusing on building sustainable value over time rather than short-term gains.
• Operational Expertise: CODI's operational expertise helps its subsidiaries improve efficiency, drive growth, and enhance profitability.

For more information, explore Mission Statement, Vision, & Core Values of Compass Diversified (CODI).

Compass Diversified (CODI) How It Makes Money

Compass Diversified (CODI) acquires and manages controlling interests in North American middle-market companies. They aim to increase cash flow and profitability through active management and then distribute these earnings to their shareholders.

Compass Diversified's Revenue Breakdown

As a holding company, Compass Diversified's revenue is derived from the diverse businesses it owns. The revenue streams and their contributions can fluctuate based on market conditions, acquisitions, and the performance of individual subsidiaries. Here’s a general framework for understanding their revenue breakdown based on the 2024 fiscal year data:

Compass Diversified's Business Economics

Compass Diversified operates under a model that focuses on acquiring and optimizing businesses across two primary sectors:

• Acquisition Strategy: They target companies with strong market positions, experienced management teams, and potential for growth.
• Operational Improvements: Post-acquisition, they implement strategies to improve operational efficiency, enhance profitability, and drive revenue growth.
• Diversification: By maintaining a diverse portfolio of businesses, they mitigate risk and create a more stable revenue stream.
• Capital Allocation: They strategically allocate capital to support the growth initiatives of their subsidiaries and pursue new acquisition opportunities.

Compass Diversified's Financial Performance

Here are key aspects of Compass Diversified's financial performance:

• Revenue Growth: Revenue growth is driven by the performance of their individual businesses and strategic acquisitions.
• Profitability: Profitability is enhanced through operational improvements, cost management, and revenue synergies across their portfolio.
• Cash Flow: Strong cash flow generation from their businesses supports dividend payments and reinvestment in growth opportunities.
• Return on Investment: They aim to generate attractive returns on invested capital (ROIC) through effective capital allocation and value creation initiatives.

To gain more insights into the company's financial standing, you might find this resource helpful: Breaking Down Compass Diversified (CODI) Financial Health: Key Insights for Investors

Compass Diversified (CODI) Market Position & Future Outlook

Compass Diversified stands as a unique player in the investment management sector, leveraging its permanent capital base to acquire and manage controlling interests in North American middle-market companies. With a focus on diverse industries, the company aims to build long-term value through operational improvements and strategic growth initiatives. Looking ahead, Compass Diversified is navigating a dynamic market landscape, with both opportunities for expansion and potential challenges to address.

Competitive Landscape

Opportunities & Challenges

Industry Position

Compass Diversified distinguishes itself through its unique approach to acquiring and managing middle-market companies. Key aspects of its industry position include:

• Permanent Capital Base: Unlike traditional private equity funds, Compass Diversified operates with a permanent capital base, allowing for a longer-term investment horizon and greater flexibility in strategic decision-making.
• Diversified Portfolio: The company's portfolio spans various industries, reducing overall risk and providing exposure to different growth opportunities.
• Operational Expertise: Compass Diversified actively engages with its portfolio companies to drive operational improvements, enhance profitability, and create long-term value.

To gain more insights into the company's guiding principles, explore the Mission Statement, Vision, & Core Values of Compass Diversified (CODI).