olivLaw · US equity research
Compass Diversified Holdings CODI
Household Furniture · SIC 2510 · Vertical: Household Furniture (SIC 2510)
Compass Diversified Holdings is a holding company that acquires controlling interests in small and middle-market North American businesses in branded consumer and industrial sectors and actively manages them. In 2026 it is working through a repair period after the Lugano investigation and accounting restatements, with GAAP net revenues down 11.4% in the second quarter, while the branded consumer division shows rising operating performance. Because debt is still above 1.5 billion dollars, the trajectory of the balance sheet is in focus.
The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).
At the close of 05 Nov 2026, Compass Diversified Holdings (CODI) stock was 11.47 USD (−6.82% on the day), with market capitalisation 863.0 m USD, dividend yield 0.00%, beta 1.02, 52-week range 4.65–12.71 USD. Latest reported quarter (Q2 2026): revenue of 424.0 m USD (−11.4% YoY), net income of 81.1 m USD, diluted EPS 0.86 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
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Technical reading
- RSI (14)
- 55.8
- strong (55–70)
- Bollinger (20, 2)
- 9.61 – 12.10
- in the upper half of the band · %B 0.75 · band width 22.9%
- SMA 50 / 200
- 11.06 / 9.91
- uptrend (price > SMA50 > SMA200)
- MACD (12, 26, 9)
- 0.21 / 0.04
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | +4.1% | −5.9% | +10.0 pp | — |
| 3 months | +6.5% | −4.6% | +11.1 pp | — |
| 6 months | −4.7% | +0.2% | −4.9 pp | — |
| Year to date | +139.0% | +7.4% | +131.5 pp | — |
| 1 year | +78.9% | +8.2% | +70.7 pp | −12.9% |
| 3 years | −38.2% | +68.4% | −106.6 pp | +30.5% |
| 5 years | −63.1% | +56.5% | −119.7 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q2 2026 · 30 Jun 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q3 '24 | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 456.6 m | 493.9 m | 453.8 m | 478.7 m | 472.6 m | 468.6 m | 426.9 m | 424.0 m |
| Cost of revenue | 259.9 m | 303.3 m | 257.7 m | 270.1 m | 264.8 m | 266.5 m | 237.5 m | 224.1 m |
| Gross profit | 196.6 m | 190.6 m | 196.0 m | 208.5 m | 207.7 m | 202.1 m | 189.4 m | 200.0 m |
| SG&A | 146.0 m | 166.3 m | 150.4 m | 162.1 m | 179.3 m | 168.9 m | 132.0 m | 134.3 m |
| Operating income | 8.3 m | -18.6 m | 3.4 m | -27.2 m | -11.1 m | 46.0 m | -1.9 m | 29.0 m |
| Depreciation & amortisation | 34.9 m | 33.5 m | 36.8 m | 35.2 m | 35.0 m | 35.6 m | 36.8 m | 35.1 m |
| Pre-tax income | -61.7 m | -73.3 m | -47.2 m | -63.4 m | -81.0 m | -106.0 m | -23.8 m | 127.3 m |
| Income tax | 2.8 m | -2.9 m | 2.5 m | 17.4 m | 5.8 m | -26.6 m | 7.1 m | 45.4 m |
| Net income | -36.0 m | -43.6 m | -30.0 m | -51.2 m | -74.0 m | -71.2 m | -30.8 m | 81.1 m |
| Diluted EPS | -0.62 | -0.74 | -0.59 | -0.88 | -1.21 | -1.20 | -0.62 | 0.86 |
| Operating cash flow | -48.4 m ≈ | -16.1 m | -29.3 m | -35.2 m ≈ | 10.7 m ≈ | 47.0 m | 23.9 m | 29.7 m ≈ |
| Capex | 15.1 m ≈ | 22.9 m | 13.1 m | 10.9 m ≈ | 10.2 m ≈ | 10.1 m | 5.1 m | 6.2 m ≈ |
| Share repurchases | 0 ≈ | 9.6 m | — | — | — | — | — | — |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Fiscal years
| Fiscal year | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 1.4 bn | 1.5 bn | 1.6 bn | 1.7 bn | 1.8 bn | 1.7 bn | 1.8 bn | 1.9 bn |
| Revenue YoY | +35.4% | +6.8% | +7.6% | +10.4% | +1.9% | −3.8% | +5.8% | +4.8% |
| Net income | -5.7 m | 301.9 m | 22.8 m | 114.6 m | -59.2 m | 108.6 m | -208.9 m | -226.4 m |
| Net income YoY | −120.4% | unavailable | −92.5% | +402.9% | −151.7% | unavailable | −292.2% | unavailable |
| Diluted EPS | -0.42 | 3.64 | -0.34 | 0.73 | -1.37 | 0.70 | -3.83 | -3.59 |
| Diluted EPS YoY | unavailable | unavailable | −109.3% | unavailable | −287.7% | unavailable | −647.1% | unavailable |
| net % | -0.4% | 20.8% | 1.5% | 6.6% | -3.4% | 6.4% | -11.7% | -12.1% |
| Free cash flow | 73.5 m | 57.6 m | 119.2 m | 100.9 m | -106.8 m | -38.4 m | -207.8 m | -51.1 m |
Reported results vs expectations
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Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 68.0 m USD
- Financial debt
- 1.9 bn USD
- Net debt
- 1.8 bn USD
- Equity
- 573.7 m USD
- Total assets
- 3.0 bn USD
- Debt / equity
- 3.27x
- Current ratio
- 2.42x
- ROE
- -41.0%
- ROA
- -7.1%
- FCF margin
- -2.7%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 1.6 bn | 1.7 bn | 1.8 bn | 1.7 bn | 1.8 bn | 1.9 bn | SEC (XBRL)· 27 Feb 2026verified |
| Cost of revenue | 913.8 m | 1.1 bn | 1.1 bn | 1.0 bn | 1.0 bn | 1.1 bn | SEC (XBRL)· 27 Feb 2026verified |
| Gross profit | 533.8 m | 661.6 m | 649.4 m | 674.7 m | 750.4 m | 814.4 m | SEC (XBRL)· 27 Feb 2026verified |
| Research & development | 3.0 m | 11.4 m | 11.7 m | 13.9 m | 16.9 m | 16.6 m | SEC (XBRL)· 27 Feb 2026verified |
| SG&A | 359.6 m | 418.4 m | 441.6 m | 502.0 m | 587.5 m | 660.7 m | SEC (XBRL)· 27 Feb 2026verified |
| Operating income | 78.0 m | 123.1 m | 44.4 m | -69.4 m | -14.9 m | 11.1 m | SEC (XBRL)· 27 Feb 2026verified |
| Depreciation & amortisation | 103.3 m | 112.0 m | 115.9 m | 133.6 m | 142.7 m | 142.5 m | SEC (XBRL)· 27 Feb 2026verified |
| EBITDA | 181.3 m ≈ | 235.1 m ≈ | 160.3 m ≈ | 64.2 m ≈ | 127.9 m ≈ | 153.6 m ≈ | SEC (XBRL)· 27 Feb 2026derived |
| Interest expense | 45.8 m | 58.8 m | 85.3 m | 109.9 m | 122.8 m | 175.3 m | SEC (XBRL)· 27 Feb 2026verified |
| Pre-tax income | 27.2 m | 26.7 m | -113.9 m | -266.5 m | -309.2 m | -297.6 m | SEC (XBRL)· 27 Feb 2026verified |
| Income tax | 13.6 m | 15.3 m | 29.5 m | 8.2 m | 18.6 m | -945.0 k | SEC (XBRL)· 27 Feb 2026verified |
| Net income | 22.8 m | 114.6 m | -59.2 m | 108.6 m | -208.9 m | -226.4 m | SEC (XBRL)· 27 Feb 2026verified |
| Diluted EPS | -0.34 | 0.73 | -1.37 | 0.70 | -3.83 | -3.59 | SEC (XBRL)· 27 Feb 2026verified |
| Weighted average diluted shares | 63.2 m | 65.4 m | 70.7 m | 72.1 m | 75.5 m | 75.2 m | SEC (XBRL)· 27 Feb 2026verified |
| Dividend per share | 1.44 | 2.21 | 1.00 | 1.00 | 1.00 | 0.50 | SEC (XBRL)· 27 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 60.0 m | 160.7 m | 52.7 m | 446.6 m | 59.7 m | 68.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Receivables | 206.7 m | 277.7 m | 203.7 m | 185.2 m | 207.2 m | 202.9 m | SEC (XBRL)· 27 Feb 2026verified |
| Inventories | 350.6 m | 565.7 m | 561.5 m | 522.5 m | 571.2 m | 404.1 m | SEC (XBRL)· 27 Feb 2026verified |
| Current assets | 708.4 m | 1.1 bn | 1.0 bn | 1.3 bn | 964.8 m | 845.2 m | SEC (XBRL)· 27 Feb 2026verified |
| Property, plant & equipment, net | 153.7 m | 186.5 m | 183.4 m | 191.3 m | 244.7 m | 209.7 m | SEC (XBRL)· 27 Feb 2026verified |
| Goodwill | 733.2 m | 586.0 m | 863.8 m | 773.6 m | 895.9 m | 895.4 m | SEC (XBRL)· 27 Feb 2026verified |
| Intangibles (excl. goodwill) | 834.1 m | 872.7 m | 891.3 m | 808.3 m | 983.4 m | 892.8 m | SEC (XBRL)· 27 Feb 2026verified |
| Total assets | 2.6 bn | 3.1 bn | 3.5 bn | 3.3 bn | 3.3 bn | 3.0 bn | SEC (XBRL)· 27 Feb 2026verified |
| Accounts payable | 91.7 m | 124.2 m | 77.1 m | 90.7 m | 103.2 m | 96.3 m | SEC (XBRL)· 27 Feb 2026verified |
| Short-term debt | 0 | 0 | 10.0 m | 1.7 bn | 1.8 bn | 37.5 m | SEC (XBRL)· 27 Feb 2026verified |
| Long-term debt | 899.5 m | 1.3 bn | 1.8 bn | 0 | 0 | 1.8 bn | SEC (XBRL)· 27 Feb 2026verified |
| Current liabilities | 294.7 m | 361.6 m | 457.0 m | 2.2 bn | 2.4 bn | 349.6 m | SEC (XBRL)· 27 Feb 2026verified |
| Total liabilities | 1.4 bn | 1.9 bn | 2.6 bn | 2.5 bn | 2.8 bn | 2.5 bn | SEC (XBRL)· 27 Feb 2026verified |
| Equity | 1.2 bn | 1.0 bn | 928.9 m | 856.4 m | 530.6 m | 573.7 m | SEC (XBRL)· 27 Feb 2026verified |
| Shares outstanding at year end | — | — | — | — | — | 75.2 m | SEC (XBRL)· 14 Jan 2026verified |
Cash flow · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 148.6 m | 134.1 m | -46.6 m | 16.6 m | -151.1 m | -6.8 m | SEC (XBRL)· 27 Feb 2026verified |
| Capex | 29.4 m | 33.1 m | 60.2 m | 55.0 m | 56.7 m | 44.3 m | SEC (XBRL)· 27 Feb 2026verified |
| Free cash flow | 119.2 m ≈ | 100.9 m ≈ | -106.8 m ≈ | -38.4 m ≈ | -207.8 m ≈ | -51.1 m ≈ | SEC (XBRL)· 27 Feb 2026derived |
| Investing cash flow | -700.8 m | -317.5 m | -626.7 m | 570.5 m | -422.5 m | -42.6 m | SEC (XBRL)· 27 Feb 2026verified |
| Financing cash flow | 521.7 m | 273.2 m | 575.2 m | -198.7 m | 184.1 m | 55.1 m | SEC (XBRL)· 27 Feb 2026verified |
| Share repurchases | — | 0 | 0 | 9.3 m | 9.6 m | 0 | SEC (XBRL)· 27 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
Score: 28 / 100
A scoring methodology on indicators and valuation, not investment advice.
score < 40
Closing price
05 Nov 2026Source: olivLaw, closing series
Market cap: 863.0 m USD
Key indicators
Coverage and freshness
Score by group
- Balance sheet20
- Returns0
- Quality15
- Growth18
- Valuation62
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 6.57 – 98.49 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)36.42 – 98.49 (Mid 55.97)WACC 6.5% · starting FCFF 226.8 m USD · terminal value share of EV 82%The WACC × g sensitivity gives the method's bounds; these are not probabilities.Reverse DCF: no growth between −30% and +40% justifies the price
- Peers: EV/EBITDAunavailable · not enough peers
- Peers: P/Eunavailable · the base of the ratio is not positive
- Dividend discount (DDM)6.57 – 8.84 (Mid 7.54)
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Unattractive profile · Score 28/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | 2.4% | 3 (on a fixed band) | 15% |
| Net margin · Quality | -5.3% | 33 (vs peers) | 9% |
| FCF conversion · Quality | unavailable | unavailable | — |
| Revenue CAGR 3Y · Growth | 2.2% | 18 (on a fixed band) | 12% |
| EPS CAGR 3Y · Growth | unavailable | unavailable | — |
| Net debt / EBITDA · Balance sheet | 7.3x | 0 (on a fixed band) | 15% |
| Interest coverage · Balance sheet | 0.4x | 0 (on a fixed band) | 9% |
| Current ratio · Balance sheet | 2.3x | 100 (on a fixed band) | 6% |
| P/E (TTM) · Valuation | unavailable | unavailable | — |
| EV/EBITDA · Valuation | 11.5x | 32 (on a fixed band) | 15% |
| FCF yield · Valuation | 9.2% | 100 (on a fixed band) | 12% |
| Shareholder yield (distributions) · Returns | 0.0% | 0 (on a fixed band) | 9% |
| Payout ratio (FCF) · Returns | unavailable | unavailable | — |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet20/100 · 3/3 factors with a value
- Growth· partial18/100 · 1/2 factors with a value
- Quality15/100 · 2/3 factors with a value
- Returns· partial0/100 · 1/2 factors with a value
- Valuation62/100 · 2/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
COMPASS DIVERSIFIED HOLDINGS (CODI). Latest full fiscal year: 2025; data up to 2026-06-30.
Figures computed from the financial statements: revenue 1.9 bn USD in 2025; YoY growth 4.8%; net margin -5.3%; ROE -17.7%; net debt/EBITDA 7.3x.
The estimated value range is 21.49–53.66 USD per share (median of 2 methods, agreement: low); assumptions are illustrative. Against the central value of 31.75 USD, the price of 11.47 USD leaves a potential of 176.8% (value / price − 1) and a margin of safety of 63.9% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 28/100, methodological classification: unattractive profile (score, margin of safety and method agreement together; not a judgement of the right price). Groups assessed only in part: growth, returns. Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- Current ratio: 2.3x
- FCF yield: 9.2%
- The price is below the estimated value range
What contradicts it
- ROIC: 2.4%
- Revenue CAGR 3Y: 2.2%
- Net debt / EBITDA: 7.3x
- Interest coverage: 0.4x
- Shareholder yield (distributions): 0.0%
- The valuation methods diverge
Not assessed (insufficient data or a ratio without meaning): FCF conversion, EPS CAGR 3Y, P/E (TTM), Payout ratio (FCF).
Versus the vertical median
Household Furniture (SIC 2510) · same industry (4-digit SIC) · compared with 6 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| SGISomnigroup International Inc. | 14.3 bn | 27.1 | 17.6% | 7.0% | +51.6% | −26% / +68% |
| LZBLa-Z-Boy Incorporated | 1.3 bn | 16.5 | 8.0% | 3.9% | +0.8% | −16% / −7% |
| CODICompass Diversified Holdings | 863.0 m | — | -17.7% | -5.3% | +4.8% | +79% / −38% |
| XMAXXmax Inc. | 322.6 m | 11.6 | 52.9% | 185.9% | +72.6% | −10% / +144% |
| FLXSFlexsteel Industries, Inc. | 305.6 m | 12.0 | 20.5% | 6.7% | +4.1% | +86% / +334% |
| HOFTHooker Furnishings Corporation | 156.2 m | — | -9.9% | -8.7% | −12.4% | +36% / −18% |
| PRPLPurple Innovation, Inc. | 40.6 m | — | — | -8.9% | −3.9% | −87% / −84% |
1- and 3-year price returns: for CODI from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | insufficient data Total return unavailable · Per year unavailable | insufficient data Total return unavailable · Per year unavailable | insufficient data Total return unavailable · Per year unavailable |
| 3 years | insufficient data Total return unavailable · Per year unavailable | insufficient data Total return unavailable · Per year unavailable | insufficient data Total return unavailable · Per year unavailable |
| 5 years | insufficient data Total return unavailable · Per year unavailable | insufficient data Total return unavailable · Per year unavailable | insufficient data Total return unavailable · Per year unavailable |
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 10 Aug 2026; since then the company filed 8-K (04 Nov 2026 · results), 10-Q (04 Nov 2026).
In brief
Compass Diversified Holdings is a holding company that acquires controlling interests in small and middle-market North American businesses in branded consumer and industrial sectors and actively manages them. In 2026 it is working through a repair period after the Lugano investigation and accounting restatements, with GAAP net revenues down 11.4% in the second quarter, while the branded consumer division shows rising operating performance. Because debt is still above 1.5 billion dollars, the trajectory of the balance sheet is in focus.
SWOT
Strengths
- A diversified portfolio of subsidiaries with leading positions in their categories, especially in branded consumer, offers protection against weakness in any single market.
- Profit growth in the branded consumer division and at Arnold shows that operations can generate cash even in difficult periods.
- A financing model that does not depend on third-party credit allows fast deal closings and appeals to sellers who value discretion.
Weaknesses
- Accounting restatements and significant internal control weaknesses weigh on investor confidence and complicate access to financing.
- High debt and tight credit covenants limit flexibility and could trigger restrictions if results decline.
- Dependence on the external manager and its fees can reduce the attractiveness of the company for shareholders, especially when profits are under pressure.
Opportunities
- Debt reduction after the sale of the Sterno food service division and lower management fees from 2027 could improve the balance sheet and shareholder returns.
- If the branded consumer division sustains its growth, it could support future distributions to shareholders.
- Selective subsidiary sales could release value and reduce debt if prices are attractive.
Threats
- Regulatory investigations by the SEC and DOJ linked to Lugano could lead to fines, sanctions or additional legal costs.
- A breach of covenants under the main credit facility could allow lenders to accelerate debt and restrict operations.
- Trade pressure and weaker discretionary demand could reduce revenues in both the consumer and industrial divisions.
Risks
- Government investigations linked to Luganohigh
Regulators are investigating the company and the Lugano subsidiary, and the outcome could include sanctions, fines and compliance requirements.
- Credit covenantshigh
Failure to comply with covenants in future periods could allow lenders to declare the debt due and limit liquidity.
- Weak internal controlsmedium
The control weaknesses identified in financial reporting could lead to further restatements if remediation fails.
- Recovery of the Lugano receivablemedium
The collateral value for the intercompany loan is below the loan amount, and recoveries from the bankruptcy are uncertain.
- Industrial cyclicalitylow
Lower demand in aerospace, energy and industry could reduce revenues and profits in the industrial divisions.
Investment thesis
What would need to be true (bull case)
- If debt reduction continues and the branded consumer divisions sustain their growth, the balance sheet could strengthen and distributions to shareholders could return.
- Strong profit growth at Arnold and in the consumer divisions shows that the portfolio can generate cash in the current environment.
- Lower management fees from 2027 and closer alignment with shareholders could improve the net return for investors.
What would break the thesis
- If investigations linked to Lugano widen, legal costs and possible sanctions could reduce investor confidence and access to capital.
- Debt remains high, and leverage could limit flexibility if industrial revenues keep falling.
- Restatements and weak internal controls could lead to further corrections, delaying a return to financial normality.
What to watch
- Quarterly results and delivery against the 2026 Subsidiary Adjusted EBITDA outlookQ3 2026
- Actual leverage level against the covenant thresholdQ4 2026
- Progress of SEC and DOJ investigations and remediation of internal controlsnext 10-K
- Recoveries from the Lugano process and the transition to the new CEO2027
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 10 Aug 2026; since then the company filed 8-K (04 Nov 2026 · results), 10-Q (04 Nov 2026).
The business
Compass Diversified Holdings is a Delaware statutory trust that controls the operating company Compass Group Diversified Holdings LLC. Its model is to acquire North American businesses with strong market positions, stable cash flows and low obsolescence risk, then manage them actively and support growth. Day-to-day management is provided by an external manager, CGM, under a management services agreement, and subsidiaries are grouped into branded consumer and industrial businesses. According to 2026 filings, the company operates eight segments after the sale of Sterno's food service business and the deconsolidation of Lugano.
The acquisition process targets businesses with annual cash flows of up to 100 million dollars, mainly because this segment is fragmented and sometimes offers more attractive prices. Third-party financing is less available for these deals, and the company can close transactions without external financing conditions, which appeals to sellers who value confidentiality and speed. The permanent capital model lets it buy at any point in the economic cycle.
In 2025 the company suspended quarterly distributions to common shareholders after the Lugano investigation, and after the restatements it went through a balance sheet repair process. The governance structure remains similar to a Delaware corporation, with a board overseeing the external manager.
Segments
Corporate
Corporate costs and manager fees sit outside the subsidiary figures and directly affect the company's ability to pay distributions and reduce debt. Lugano, deconsolidated in November 2025, is no longer among the active segments, but the company retains an equity interest and a receivable from it.
Market context
The market for small and middle-market North American businesses is described by management as fragmented, with fewer financial buyers for deals of this size. Demand for branded consumer products depends on discretionary buying behaviour, while the industrial segment is tied to aerospace, automotive and energy cycles.
The company says diversification helps it navigate geopolitical uncertainty and trade changes, which affect costs and consumer sentiment, especially for discretionary products. Macroeconomic trends could influence revenues in both the consumer and industrial segments.
Trends
- Debt reduction and refinancingtailwind
After the sale of the Sterno food service division, the company applied more than 280 million dollars to debt reduction and extended its credit maturities. If debt reduction continues, pressure on liquidity could ease.
- Shift toward branded consumertailwind
The branded consumer segment delivered double-digit profit growth while industrial declined. If this pattern holds, the portfolio could become less cyclical.
- Discretionary consumer demandheadwind
Changes in spending by lower and middle income consumers can affect apparel and accessory sales. Demand pressure could slow growth in the branded segment.
- Industrial cycle and trade costsmixed
A slowdown in aerospace, energy and industrial markets, together with trade-related costs, could reduce revenues in the industrial divisions. The effect is mixed, since Arnold grew strongly in the same quarter.
Competitive position
The company competes for acquisitions with private equity funds and strategic investors that pursue small and middle-market businesses. Its stated advantage is the ability to close deals quickly without third-party financing, and a long-term approach for sellers who want discretion.
In the operating segments, competition depends on each subsidiary: 5.11 and BOA face branded apparel and footwear makers, and Arnold competes with magnet and motor producers. The available sources do not identify directly listed competitors, so the list below is limited.
- Mid-market private equity funds
Compete for the same small and middle-market acquisitions in North America, especially in structured financing deals.
- Strategic industry investors
Can acquire the same subsidiaries with operating synergies, and compete for sellers seeking an industry-experienced buyer.
- Permanent magnet and electric motor producers
Compete with the Arnold division in aerospace, automotive and energy markets, where technical quality and supply chains are decisive.
- Tactical equipment and performance footwear brands
Compete with 5.11 and BOA in the performance products market, where distribution and innovation are key factors.
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
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News & filings
In the press
No news in our archive over the last 180 days.
SEC filings
- Current report04 Nov 2026Results of operations · Regulation FD disclosure · Financial statements and exhibits
- Quarterly report04 Nov 2026
- Current report03 Nov 2026Item 3.03 · Amendments to articles or bylaws · Financial statements and exhibits
- Current report01 Oct 2026Other events · Financial statements and exhibits
- Current report10 Aug 2026Material agreement · Results of operations · Financial statements and exhibits
- Quarterly report10 Aug 2026
- Current report16 Jul 2026Item 4.01 · Financial statements and exhibits
- Current report13 Jul 2026Material agreement · Regulation FD disclosure · Financial statements and exhibits
- Current report01 Jul 2026Other events · Financial statements and exhibits
- Current report24 Jun 2026Material agreement · Other events · Financial statements and exhibits
Sources
- [1] Form 10-K, fiscal year ended 2025-12-31 · SEC / Compass Diversified Holdings · 27 Feb 2026
- [2] Form 10-Q, quarter ended 2026-06-30 · SEC / Compass Diversified Holdings · 10 Aug 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / Compass Diversified Holdings · 10 Aug 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.