Compass Diversified (CODI) Investor update summary

Acquisition Overview

• Entered a definitive agreement to acquire The Honey Pot Company, a leading holistic feminine care brand, for a $380 million enterprise value, with $347 million funded by CODI and management rolling over significant equity and remaining in leadership roles.

• The acquisition is fully funded with cash on hand, supported by a recent $75.2 million equity investment from Allspring Global Investments, and is expected to close in February 2024.

• The deal was secured through a limited, sponsor-focused process, with cultural fit, long-term partnership, and a mission-driven, all-women executive team as key differentiators.

• The acquisition price reflects a significant discount to historical wellness brand multiples, enabled by current market conditions and the acquirer's financial strength.

• Employee ownership will be broadened through a company-wide option program, aligning incentives for long-term growth.

Market Opportunity and Brand Positioning

• Addresses a $17+ billion personal care market, with Honey Pot holding less than 1% share and only 4.5% household penetration, indicating substantial growth potential.

• Recognized as the #5 largest feminine care brand at retail, with a unique holistic, inclusive, and science-backed approach.

• Demonstrates strong brand equity by normalizing feminine wellness and engaging younger consumers through education and digital content.

• Marketing investments are expected to drive brand awareness and household penetration, focusing on younger consumers and destigmatizing feminine wellness.

• The company’s digitally native, retailer-first strategy has resulted in strong partnerships with Target, Walmart, CVS, Walgreens, and Amazon, with over 33,000 retail doors in the U.S.

Product Portfolio and Innovation

• Offers over 60 SKUs across personal care, menstrual, consumer health, and sexual wellness categories.

• Products feature plant-derived, clinically tested ingredients, and are gynecologist and dermatologist approved.

• Maintains high quality standards with OCS certified organic cotton and BPA-free applicators.

• Maintains the most followed feminine care brand presence on Instagram, supporting strong community engagement.

• Plans include continued product innovation and expansion into new retail channels, e-commerce, and potentially international markets.