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Compass Diversified Holdings Message Board

  • misterstockwell misterstockwell Oct 17, 2011 5:10 PM Flag

    Staffmark SOLD!

    Probably excellent timing on CODI's part with another recession on the way. However, not sure if the gain is what they were expecting after owning it for so long. Overall, better off without it at this point no matter what price they received.

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    • It was a trade -Staffmark for Camelbak- hope it was a good one!

    • Couldn't agree more. Cash is King in this environment. Also interesting is that the purchaser is a Japanese Company buying overseas assets with very strong yen. My guess is that Staffmark wasn't attractive enough for a USA firm to offer more. Staffmark also involves a lot of human resource issues not found in CODI's other operations. Picking up a few other medium sized manufacturing operations probably makes more strategic sense. However, I do admit that having circuit boards,shock absorbers,baby carriers, and water bottles makes for a strange conglomerate!!

    • We'll see the reaction of the sale in today's stock price relative to the market. CAD will go down but the debt situation is cleaned up. The recent downgrade on CODI's speculative grade liquidity rating from SGL-2 to SGL-3 by Moody’s will probably be reversed because the revolving credit will be paid up from the proceeds of the sale.

      Analyst projections were originally for earnings (fairly close to CAD) to be around $1.76/unit this year and $1.98/unit next year as compared to the $1.44/unit distribution. The analysts' adjustments will reflect the expected new CAD and then we'll see where CODI stands with expected CAD compared to the current distribution rate.

    • This is a poor decision. Staffing firms face a bright future - corporations aren't going to hire full time folks any time in the near future. That means they turn to staffing firms for short term labor. I don't find the price to be very strong considering the revenue Staffmark takes in.

      Would have been better off waiting (even for a year or two) and doing the IPO and selling it that way. They need to announce what the distribution will be after the sale.

    • Looks like we will be giving up about a billion in revenue and maybe $20 mil in operating income. Low margin, lots of headaches--probably a decent sale. Wonder what the effect on distribution will be???

 
CODI
18.25-0.06(-0.33%)Aug 28 4:02 PMEDT

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