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Compass Diversified Holdings Message Board

  • mthiker2004 mthiker2004 Apr 12, 2011 10:34 AM Flag

    Staffmark IPO

    I'm surprised no one has posted regarding the Staffmark IPO. I'm similarly surprised that the share price didn't get a bounce from this announcement. CODI has only sold two other businesses, giving CODI shareholders about $100m in cap gains from those two sales. As Staffmark is proportionately larger than the two entities previously sold, it is not unreasonable to guess that the cap gain will be similarly larger. I'm guessing that a quick comparison of multiples to MAN might give us an idea of what Staffmark might yield.

    Of course the announcement isn't likely to help all the shorts that have poured into CODI in the past few weeks.


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    • Hiker, I think he wait is for the success of the IPO.

      I think this is actually a good sign in that investors are looking for the News and not buying the Rumour. So I think the good effect of IPO will come on the day or two after its launch.

      I've bought in heavily as CODI's price eroded and maintain this is still a good value below $17.

    • I have a question.

      I know that CODI is not a BDC, but, generally given their business structure and then the BDC structure, what is the requirement for payout of capital gains to shareholders vs just regular income payout?

    • The timing is interesting since Staffmark's industry is supposedly picking up. The whole staffing sector has been very strong of late. Is management expecting another downturn in employment, or do they have something better in mind for the money?
      More than likely, it is an expectation that Staffmark will get a higher valuation outside of CODI. CODI will get the cash from the IPO and whatever percentage that is kept (if any) will get a valuation boost.

18.60-0.05(-0.27%)1:25 PMEDT