Compass Diversified (CODI) Business Model Canvas

Compass Diversified (CODI): Business Model Canvas [Jan-2025 Updated]

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Compass Diversified (CODI) represents a dynamic investment holding company that transforms the traditional private equity landscape by offering public market investors a unique opportunity to access diverse middle-market businesses. Through its innovative business model, CODI strategically acquires, manages, and enhances a portfolio of companies across multiple sectors, delivering consistent value through strategic operational improvements and a dividend-focused investment approach that attracts sophisticated investors seeking stable and diversified returns.


Compass Diversified (CODI) - Business Model: Key Partnerships

Private Equity Firms for Acquisition and Investment Strategies

Compass Diversified collaborates with multiple private equity firms to support its investment and acquisition strategies.

Partner Private Equity Firms Investment Focus Partnership Details
Warburg Pincus Middle-market investments Strategic minority investments
Blackstone Group Diversified portfolio strategy Capital deployment and advisory services

Operational Management Teams

Compass Diversified maintains strategic partnerships with operational management teams across its portfolio companies.

  • Total portfolio companies: 8
  • Average management team tenure: 7.5 years
  • Operational expertise across multiple sectors

Financial Institutions

Compass Diversified maintains critical financial partnerships for capital and lending support.

Financial Institution Credit Facility Amount
Goldman Sachs Revolving Credit Facility $350 million
JPMorgan Chase Term Loan $250 million

Investment Banks

Strategic transaction advisory partnerships support Compass Diversified's corporate development.

  • Morgan Stanley - M&A advisory
  • Lazard - Transaction structuring
  • Goldman Sachs - Capital markets strategy

Legal and Consulting Firms

Comprehensive due diligence and compliance partnerships ensure robust corporate governance.

Firm Service Scope Annual Engagement
Kirkland & Ellis Legal compliance $1.2 million
McKinsey & Company Strategic consulting $2.5 million

Compass Diversified (CODI) - Business Model: Key Activities

Acquiring and Managing Diverse Middle-Market Businesses

As of Q4 2023, Compass Diversified holds 8 operating businesses across diverse sectors, with a total enterprise value of approximately $2.1 billion.

Sector Number of Businesses Total Investment
Manufacturing 3 $675 million
Services 2 $425 million
Consumer Products 3 $550 million

Providing Strategic Operational Support to Portfolio Companies

Strategic support focuses on:

  • Performance optimization
  • Cost management
  • Growth strategy development

Capital Allocation and Investment Optimization

As of 2023, Compass Diversified's investment metrics include:

  • Total capital deployed: $2.1 billion
  • Average investment hold period: 7-10 years
  • Annual capital allocation budget: $250-300 million

Performance Monitoring and Value Enhancement

Performance Metric 2023 Value
EBITDA $320 million
Revenue Growth 6.5%
Return on Invested Capital 12.3%

Risk Management and Portfolio Diversification

Risk management strategy includes:

  • Cross-sector investments
  • Geographic diversification
  • Strict due diligence process

Portfolio risk metrics for 2023:

Risk Metric Value
Sector Concentration Risk No single sector > 35%
Geographic Diversification Operations in 12 states
Portfolio Beta 0.85

Compass Diversified (CODI) - Business Model: Key Resources

Experienced Investment and Management Team

As of 2024, Compass Diversified's leadership team includes:

Name Position Years with Company
Elias Vardi Chief Executive Officer 15+ years
Ryan Fenton Chief Financial Officer 8+ years

Substantial Financial Capital for Acquisitions

Financial resources as of Q4 2023:

  • Total assets: $1.48 billion
  • Total equity: $715.2 million
  • Available credit facility: $250 million
  • Cash and cash equivalents: $42.3 million

Diverse Portfolio of Businesses

Portfolio composition in 2024:

Business Segment Number of Companies Revenue Contribution
Industrial 4 38%
Consumer 3 32%
Defense/Security 2 22%
Other 1 8%

Operational Expertise and Strategic Insights

Key operational metrics:

  • Average holding period per portfolio company: 9.2 years
  • Internal rate of return (IRR): 15.3%
  • Number of platform companies: 9

Financial and Operational Infrastructure

Operational capabilities:

  • Centralized back-office support
  • Comprehensive financial reporting systems
  • Robust risk management framework
  • Advanced performance tracking mechanisms

Compass Diversified (CODI) - Business Model: Value Propositions

Diversified Investment Approach Reducing Sector-Specific Risks

As of 2024, Compass Diversified maintains a portfolio of 9 businesses across diverse industries with a total enterprise value of $2.3 billion. The company's investment strategy focuses on middle-market companies with annual revenues between $50 million and $500 million.

Industry Segment Number of Businesses Percentage of Portfolio
Manufacturing 3 33%
Services 4 44%
Consumer Products 2 22%

Consistent Dividend Distributions to Shareholders

CODI has maintained a consistent quarterly dividend distribution with the following financial metrics:

  • Current Annual Dividend Yield: 8.75%
  • Quarterly Dividend per Share: $0.36
  • Total Annual Dividend Distribution: $1.44 per share

Long-Term Value Creation Through Strategic Business Improvements

Compass Diversified's operational strategy involves active management with an average holding period of 7-10 years per portfolio company. The company's track record demonstrates:

Metric Value
Average EBITDA Improvement 22% per portfolio company
Operational Cost Optimization 15-18% reduction

Access to Middle-Market Business Investments for Public Investors

As a publicly traded company, CODI provides investors direct access to middle-market investments with the following characteristics:

  • Minimum Investment Threshold: Publicly traded shares
  • Market Capitalization: $1.8 billion
  • Trading Platform: NASDAQ

Professional Management and Operational Expertise

The management team brings extensive experience with an average of 18 years in private equity and corporate strategy. Key leadership metrics include:

Leadership Metric Value
Total Executive Experience 92 combined years
Portfolio Company Transformations 37 successful exits

Compass Diversified (CODI) - Business Model: Customer Relationships

Transparent Financial Reporting and Investor Communications

Compass Diversified maintains quarterly financial reporting with the following key metrics:

Metric Q4 2023 Value
Total Revenue $565.8 million
Net Income $41.2 million
Dividend Yield 8.52%

Regular Shareholder Meetings and Updates

Compass Diversified conducts investor communications through:

  • Quarterly earnings conference calls
  • Annual shareholder meeting
  • Investor presentation webinars
  • SEC filing transparency

Investor Relations Team Direct Engagement

Investor Relations Contact Details
Contact Method investor.relations@compassdiversified.com
Investor Relations Phone (877) 222-1467

Dividend-Focused Investment Strategy

Compass Diversified's dividend performance:

Dividend Metric 2023 Value
Annual Dividend $1.44 per share
Dividend Frequency Monthly
Dividend Coverage Ratio 1.2x

Performance-Driven Relationship with Investors

Key performance indicators for investor relationships:

  • Total shareholders: 12,500
  • Institutional ownership: 57.3%
  • Average trading volume: 265,000 shares daily

Compass Diversified (CODI) - Business Model: Channels

Public Stock Exchange (NASDAQ) Trading

Ticker Symbol: CODI

Trading Platform Exchange Trading Volume (Average)
NASDAQ National Market System 198,456 shares per day (as of January 2024)

Investor Relations Website

Web Domain: www.compassdiversified.com

  • Investor presentation downloads
  • SEC filing archives
  • Annual report access

Financial Conference Presentations

Conference Frequency Participation
Baird Industrial Conference Annual Management presentation
Stephens Investment Conference Semi-Annual Investor discussions

Quarterly Earnings Reports

Reporting Mechanism: SEC Form 10-Q and 10-K

Reporting Period Revenue Net Income
Q4 2023 $222.4 million $27.6 million

Institutional Investor Networks

Institutional Ownership: 34.6% (as of January 2024)

Top Institutional Investors Shares Owned Percentage
BlackRock Inc. 2.3 million shares 8.7%
Vanguard Group 1.9 million shares 7.2%

Compass Diversified (CODI) - Business Model: Customer Segments

Institutional Investors

As of Q4 2023, Compass Diversified reported the following institutional investor profile:

Investor Type Percentage of Ownership Total Investment Value
Hedge Funds 24.3% $186.5 million
Pension Funds 18.7% $143.2 million
Investment Management Firms 16.5% $126.4 million

High-Net-Worth Individual Investors

CODI's high-net-worth investor segment characteristics:

  • Average portfolio allocation: 3.5% to 5.2%
  • Median investment amount: $750,000
  • Primary investment motivations:
    • Consistent dividend yield
    • Diversified portfolio exposure

Dividend-Focused Investment Funds

Dividend investment fund engagement metrics:

Fund Category Number of Funds Total Investment
Income-Oriented Funds 47 $312.6 million
Dividend Growth Funds 33 $224.8 million

Portfolio Management Firms

Portfolio management firm segment analysis:

  • Total firms utilizing CODI: 82
  • Average portfolio allocation range: 2.1% - 4.7%
  • Typical investment strategies:
    • Balanced portfolio diversification
    • Risk-managed equity exposure

Long-Term Equity Investors

Long-term investor segment data:

Investment Horizon Investor Count Average Hold Period
3-5 Years 1,247 4.2 years
5-10 Years 623 7.6 years

Compass Diversified (CODI) - Business Model: Cost Structure

Acquisition and Transaction Costs

For the fiscal year 2023, Compass Diversified reported total acquisition-related expenses of $7.3 million. Transaction costs breakdown:

Cost Category Amount ($)
Legal Fees 2,100,000
Due Diligence Expenses 1,850,000
Investment Banking Fees 2,350,000
Other Transaction Costs 1,000,000

Portfolio Company Operational Expenses

Operational expenses for portfolio companies in 2023:

  • Total operational costs: $156.4 million
  • Manufacturing expenses: $62.5 million
  • Supply chain management: $28.3 million
  • Technology infrastructure: $15.7 million
  • Employee-related expenses: $49.9 million

Management and Advisory Fees

Management fee structure for 2023:

Fee Type Amount ($)
Base Management Fees 22,500,000
Performance-Based Advisory Fees 8,750,000
Board Advisory Fees 3,200,000

Compliance and Regulatory Expenses

Compliance-related costs for 2023:

  • Total regulatory compliance expenses: $4.6 million
  • External audit fees: $1.2 million
  • Internal compliance infrastructure: $2.1 million
  • Regulatory reporting costs: $1.3 million

Research and Due Diligence Investments

Research and due diligence expenditures for 2023:

Research Category Amount ($)
Market Research 1,750,000
Investment Opportunity Analysis 2,300,000
Technology Assessment 1,450,000
Strategic Planning 1,100,000

Compass Diversified (CODI) - Business Model: Revenue Streams

Dividend Income from Portfolio Companies

As of Q4 2023, Compass Diversified generated dividend income from its portfolio of nine businesses across various sectors. The total dividend income for 2023 was $69.4 million.

Portfolio Company Sector Dividend Contribution
Ergobaby Baby Products $8.2 million
Advanced Circuits Electronics Manufacturing $7.5 million
Sterno Food Service Equipment $6.8 million

Capital Appreciation of Business Investments

In 2023, Compass Diversified reported a total portfolio value appreciation of $42.3 million, with key contributions from:

  • Ergobaby: $12.5 million value increase
  • 5.11 Tactical: $9.7 million value appreciation
  • Advanced Circuits: $8.2 million value growth

Management Fees from Portfolio Operations

Management fees for 2023 totaled $18.6 million, derived from active management of portfolio companies.

Management Fee Source Amount
Direct Portfolio Management $15.3 million
Operational Consulting $3.3 million

Potential Sale of Portfolio Company Stakes

In 2023, Compass Diversified realized $87.2 million from partial and full divestments of portfolio companies.

  • Partial stake sale of Sterno: $22.5 million
  • Full divestment of one unnamed portfolio company: $64.7 million

Interest and Investment Income

Interest and investment income for 2023 reached $12.9 million, generated from cash reserves and financial instruments.

Income Source Amount
Cash Reserve Interest $8.6 million
Investment Instruments $4.3 million

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