UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 23, 2007
COMPASS DIVERSIFIED TRUST
(Exact name of registrant as specified in its charter)
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Delaware
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0-51937
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57-6218917
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(State or other jurisdiction
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(Commission File Number)
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(I.R.S. Employer Identification
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of incorporation)
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No.)
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COMPASS GROUP DIVERSIFIED HOLDINGS LLC
(Exact name of registrant as specified in its charter)
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Delaware
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0-51938
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20-3812051
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(State or other jurisdiction
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(Commission File Number)
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(I.R.S. Employer Identification
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of incorporation)
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No.)
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Sixty One Wilton Road
Second Floor
Westport, CT 06880
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code:
(203) 221-1703
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Section 1 Registrant’s Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
Effective May 23, 2007, Compass Group Diversified Holdings LLC (the “Company”), a subsidiary
of Compass Diversified Trust (the “Trust” and, together with the Company, collectively “CODI,” “us”
or “we”), entered into an amendment (the “Amendment”) to its credit facility dated as of November
21, 2006 (the “Credit Agreement”) that was previously entered into with a group of lenders
(collectively, the “Lenders”) led by Madison Capital Funding LLC (“Madison”) as Agent for all
Lenders. The Credit Agreement was amended (i) to increase the Company’s borrowing capacity under
the Credit Agreement to $300 million, and (ii) to permit
certain acquisitions of $5 million or less to meet the
definition of, a “permitted eligible acquisition” under the Credit
Agreement, exempt of certain of the requirements. All other material terms and conditions of the Credit
Agreement were unchanged.
The foregoing brief description of the Amendment is not meant to be exhaustive and is
qualified in its entirety by the Amendment itself, which is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
Section 3 Securities and Trading Markets
Item 3.03 Material Modification to Rights of Security Holders
On May 25, 2007 the Trust held its annual meeting of shareholders (the “Annual Meeting”). At
the Annual Meeting, the Trust’s shareholders (the “Shareholders”) approved an amendment (the
“Amendment”) to the Amended and Restated Trust Agreement, dated as of April 25, 2006 (the “Trust
Agreement”), of Compass Diversified Trust among the Company, as Sponsor, The Bank of New York
(Delaware), as Delaware Trustee, and the Regular Trustees named therein. The Amendment provides
that, in the event it is determined by the Sponsor, acting through the Board of Directors, that the
Trust is, or is reasonably likely to be, required to issue Schedules K-1 to Shareholders, or if the
Board of Directors determines that it is otherwise reasonable and prudent to do so, the Sponsor
may, in lieu of the procedures set forth in the Trust Agreement and without Shareholder consent,
amend or amend and restate the Trust Agreement as necessary so that with respect to any or all
periods the Trust will be treated as a partnership for federal income tax purposes and to provide
for those provisions that are customary, necessary or useful for an entity treated as a partnership
for federal income tax purposes.
The foregoing brief description of the Amendment is not meant to be exhaustive and is
qualified in its entirety by the Amendment itself, which is attached hereto as Exhibit 4.1 and is
incorporated herein by reference.
Section 9 Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
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4.1
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Amendment No. 1 to the Amended and Restated Trust Agreement, dated as of April 25, 2006, of
Compass Diversified Trust among the Company, as Sponsor, The Bank of New York (Delaware), as
Delaware Trustee, and the Regular Trustees named therein.
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10.1
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Amendment to the Credit Agreement among Compass Group Diversified Holdings LLC, the financial
institutions party thereto and Madison Capital Funding LLC, dated as of November 21, 2006.
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99.1
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Press Release dated May 29, 2007.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: May 29, 2007
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COMPASS DIVERSIFIED TRUST
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By:
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/s/ James Bottiglieri
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James J. Bottiglieri
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Regular Trustee
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: May 29, 2007
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COMPASS GROUP DIVERSIFIED HOLDINGS LLC
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By:
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/s/ James Bottiglieri
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James J. Bottiglieri
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Chief Financial Officer
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Exhibit 10.1
INCREASE NOTICE, CONSENT AND
SECOND AMENDMENT TO CREDIT AGREEMENT
This Increase Notice, Consent and Second Amendment to Credit Agreement (this
“
Amendment
”) is entered into as of May ___, 2007, among Madison Capital Funding LLC, as
Agent for the Lenders, the undersigned Lenders, and Compass Group Diversified Holdings LLC, a
Delaware limited liability company (“
Borrower
”).
WITNESSETH
WHEREAS, Borrower, Agent and Lenders are parties to that certain Credit Agreement dated as of
November 21, 2006 (as amended to date, the “
Credit Agreement
”; capitalized terms used
herein and not otherwise defined herein shall have the respective meanings given to them in the
Credit Agreement);
WHEREAS, Borrower has requested that Agent and Lenders agree to an increase in the Revolving
Loan Commitment in the amount of $45,000,000 (the “
Revolver Increase
”) pursuant to Section
2.1.2 of the Credit Agreement and, further, that Lenders waive their right to participate, to the
extent of their respective Pro Rata Shares, in such Revolver Increase except to the extent of the
participations in the Revolver Increase that are detailed herein;
WHEREAS, Borrower has requested that Agent and Lenders consent to CBS purchasing from the
chief executive officer of CBS 50,000 shares of CBS’ stock for a total price of $875,500 (the
“
Redemption
”), notwithstanding that such stock redemption would otherwise be prohibited
under Section 7.4(b) of the Credit Agreement;
WHEREAS, Borrower has requested that Agent and Lenders agree to amend the definition of
“Permitted Eligible Acquisitions” under the Credit Agreement to revise the terms under which a
Portfolio Company may make certain Permitted Eligible Acquisitions that are add-on acquisitions;
and
WHEREAS, Borrower, Agent and Lenders have further agreed to amend the Credit Agreement in
certain other respects, subject to the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained
herein, the parties hereto agree as follows:
1.
Revolver Increase
. Pursuant to Section 2.1.2 of the Credit Agreement, Agent and
Lenders hereby consent to the Revolver Increase and Lenders hereby waive their right to
participate, to the extent of their respective Pro Rata Shares, in such Revolver Increase except to
the extent of the participations in the Revolver Increase that are detailed herein. Borrower,
Agent and Lenders hereby agree the Revolver Increase shall be effective immediately upon the
effectiveness of this amendment pursuant to the provisions of Section 7 hereof (the “
Effective
Date
”). After giving effect to the Revolver Increase on the Effective Date, the aggregate
amount of the Revolving Loan Commitments is $300,000,000 and all
references in the Credit Agreement and the other Loan Documents to the Revolving Loan
Commitment shall be considered a reference to the Revolving Loan Commitment as increased hereby.
Borrower acknowledges and agrees that such Revolver Increase shall become part of the Revolving
Loan Commitments for all purposes under the Credit Agreement and under the Collateral Documents and
shall be secured by the Collateral in all respects.
2.
Additional Lenders; Allocation of Revolver Increase
. In reliance on the
representations and warranties of Additional Lenders (as defined below) set forth in Section 6
below, Borrower, Agent, and Lenders hereby acknowledge and agree that by executing this Amendment
each of First Horizon Bank, a Division of First Tennessee Bank National Association (“
First
Horizon
”), Allied Irish Banks, p.l.c. (“
AIB
”) and NewStar Arcturus CLO I Ltd.
(“Arcturus”); together with First Horizon and AIB, each an “
Additional Lender
” and
collectively the “
Additional Lenders
”) hereby become “Lenders” under the Credit Agreement
and assume all the rights and obligations of a Lender under the Credit Agreement and the other Loan
Documents as of the Effective Date. Such Additional Lenders share of the Revolving Loan
Commitments and their Pro Rata Share shall be the applicable amount specified opposite such
Lender’s name on
Annex I
hereto. In addition, the parties hereto hereby agree that the
share of the Revolving Loan Commitment of US Bank National Association shall be increased by
$7,000,000, and that its new share of the Revolver Commitment and Pro Rata Share are set forth
opposite its name on
Annex I
hereto.
Annex I
sets forth the aggregate Revolver
Commitment and Pro Rata Share for each Lender after giving effect to the Revolver Increase.
3.
Consent to Redemption
. In reliance upon the representations and warranties of
Borrower set forth in Section 5 below and subject to the satisfaction of the conditions set forth
in Section 7 below, Agent and the Lenders party hereto hereby consent to the consummation of the
Redemption by CBS. This consent is a limited consent and shall not be deemed to constitute a
consent with respect to any other current or future departure from the requirements of any
provision of the Credit Agreement or any other Loan Documents.
4.
Amendments to Credit Agreement
. In reliance upon the representations and warranties
of Borrower set forth in Section 5 below and subject to the satisfaction of the conditions set
forth in Section 7 below, the parties hereto hereby agree to amend the Credit Agreement as follows:
(a) The definition of “Permitted Eligible Acquisition” contained in Section 1.1 to the Credit
Agreement is hereby amended and restated in its entirety as follows:
“
Permitted Eligible Acquisition
means any Acquisition by (i) an
Acquisition Subsidiary of Borrower of all or substantially all of the assets of a
Person as a New Portfolio Company of Borrower, or of all or substantially all of any
business or division of a Person as a New Portfolio Company of Borrower, (ii)
Borrower of no less than a voting majority of the capital stock, partnership
interests, membership interests or equity of any Person as a New
Portfolio Company of Borrower, (iii) a Portfolio Company (or an Acquisition
Subsidiary of such Portfolio Company) of all or substantially all of the assets of a
Person as an add-on acquisition for such Portfolio Company, or of all or
substantially all of any business or division of a Person as an add-on acquisition
for such Portfolio Company or (iv) a Portfolio Company of no less than 100% of the
capital stock, partnership interests, membership interests or equity of any Person
as an add-on acquisition for such Portfolio Company, in each case to the extent that
each of the conditions precedent set forth in Annex III shall have been satisfied;
provided
,
however
, that if such Acquisition is otherwise a Permitted
Eligible Acquisition under clauses (iii) or (iv) hereof and the aggregate
consideration to be paid in such Acquisition is $5,000,000 or less, then the
conditions set forth in clauses (1), (4), (8) and (10) of Annex III shall not be
required to be satisfied and the condition set forth in clause (12) of Annex III
shall not be required to be satisfied until thirty (30) days after giving effect to
such Acquisition; and
provided
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further
, that in the case of any
such Acquisition, (x) the Target shall be assigned the same multiple for purposes of
Availability as the Portfolio Company consummating such Acquisition and (y) there
shall be no Pro Forma EBITDA of the Target included in the Existing Portfolio
Company EBITDA (or New Portfolio Company EBITDA, as applicable) of the Portfolio
Company consummating such Acquisition, with Existing Portfolio Company EBITDA (or
New Portfolio Company EBITDA, as applicable) for the Target being acquired to be
limited to periods after the consummation of such Acquisition. It is agreed and
understood that the SES Add-On Acquisition shall be a Permitted Eligible Acquisition
within the foregoing clause (iii) so long as (x) the SES Add-On Acquisition is
consummated on or within 10 Business Days of the Closing Date and (y) no Event of
Default exists either before or after giving effect to the SES Add-On Acquisition.”
(b) Section 6.1.2 of the Credit Agreement is hereby amended by deleting the first clause and
replacing it with the following:
“Promptly when available and in any event within 45 days after the end of each
month (including months that correspond to the end of a Fiscal Quarter),”
(c) Section 6.1.6 of the Credit Agreement is hereby amended by replacing the phrase “dated as
of the end of the most recently ended month” with the phrase “dated as of the end of the most
recently ended month covered by such interim report”.
(d) Annex I to the Credit Agreement is deleted in its entirety and replaced with
Annex
I
attached hereto.
(e) Annex II to the Credit Agreement is hereby amended by adding the notice and payment
addresses listed on
Annex II
attached hereto to the end thereof.
(f) Annex III to the Credit Agreement is hereby amended by replacing the phrase “recomputed
for the most recently ended month of Borrower” in clause (5) thereof with the phrase “recomputed
for the most recent Computation Period of Borrower”.
5.
Representations and Warranties of Borrower
. Borrower hereby represents and
warrants to Agent and Lenders that, both before and after giving effect to this Amendment:
(a) The execution, delivery and performance of this Amendment has been duly authorized by all
requisite corporate action on the part of Borrower;
(b) No Default or Event of Default has occurred and is continuing; and
(c) The representations and warranties of Borrower set forth in the Credit Agreement, as
amended hereby, and in the other Loan Documents, as amended hereby, are true and correct in all
material respects as of the date hereof, with the same effect as though made on the date hereof
(except to the extent such representations and warranties expressly refer to an earlier date, in
which case they are true and correct in all material respects as of such earlier date).
6.
Representations and Warranties of Additional Lenders
. Each Additional Lender
hereby represents and warrants to Agent and Lenders that, both before and after giving effect to
this Amendment, that such Additional Lender:
(a) is legally authorized to enter into this Amendment;
(b) has received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant thereto and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into this Amendment;
(c) agrees that it will, independently and without reliance upon Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the Credit Agreement;
(d) appoints and authorizes Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement as are delegated to Agent by the terms thereof, together
with such powers as are reasonably incidental thereto;
(e) agrees that it will perform in accordance with their terms all obligations which by the
terms of the Credit Agreement are required to be performed by it as a Lender;
(f) represents that on the date of this Amendment it is not presently aware of any facts that
would cause it to make a claim under the Credit Agreement; and
(g) if organized under the laws of a jurisdiction outside the United States, has delivered to
Agent the forms prescribed by the Internal Revenue Service of the United States, which have been
duly executed, certifying as to such Additional Lender’s exemption from United States withholding
taxes with respect to all payments to be made to such Additional Lender under the Credit Agreement
or such other documents as are necessary to indicate that all such payments are subject to such tax
at a rate reduced by an applicable tax treaty.
7.
Conditions Precedent to Effectiveness
. The effectiveness of this Amendment is
subject to the prior or concurrent consummation of each of the following conditions:
(a) Agent shall have received a fully executed copy of this Amendment, together with such
other documents, agreements and instruments as Agent may reasonably require or request, including
any documents, agreements or instruments that may be required to be delivered by either Additional
Lender to Agent;
(b) all proceedings taken in connection with the transactions contemplated by this Amendment
and all documents, instruments and other legal matters incident thereto shall be reasonably
satisfactory to Agent and its legal counsel; and
(c) no Default or Event of Default shall have occurred and be continuing or shall be caused by
the transactions contemplated by this Amendment.
8.
Miscellaneous
.
(a)
Governing Law
. THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF ILLINOIS.
(b)
Counterparts
. This Amendment may be executed in any number of counterparts, and
by the parties hereto on the same or separate counterparts, and each such counterpart, when
executed and delivered, shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Amendment.
(c)
Reference to Credit Agreement
. Each reference in the Credit Agreement to “this
Agreement,” “hereunder,” “hereof,” “herein” or words of like import, and each reference in the
Credit Agreement or in any other Loan Document, or other agreements, documents or other instruments
executed and delivered pursuant to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended by this Amendment.
(d)
Costs and Expenses
. Borrower acknowledges that Section 10.4 of the Credit
Agreement applies to this Amendment and the transactions, agreements and documents contemplated
hereunder.
Exhibit 99.1
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800 Second Avenue
New York, NY 10017
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Tel 212 682 6300
Fax 212 697 0910
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Compass Diversified Trust
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Investor Relations Contact:
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Jim Bottiglieri
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KCSA Worldwide
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Chief Financial Officer
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Jeffrey Goldberger / Garth Russell
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203.221.1703
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212.896.1249 / 212.896.1250
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jim@compassequity.com
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jgoldberger@kcsa.com
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grussell@kcsa.com
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Compass Diversified Trust Announces Results From
Annual Meeting of Shareholders
Revolving Credit Facility Increased to $300 million
Westport, CT, May 29, 2007
– Compass Diversified Trust (NASDAQ: CODI) and Compass Group Diversified
Holdings LLC (collectively, the “Trust” or “CODI” or the “Company”) announced today the results
from the Company’s Annual Meeting of Shareholders held on Friday, May 25, 2007, in Norwalk, CT. At
the meeting, the Shareholders of the Company approved all resolutions put before them, including
the election of two Class I directors, the adoption of an amendment to the Company’s Trust
Agreement and the appointment of the Company’s independent auditor.
Harold S. Edwards and Mark H. Lazarus were elected Class I directors to serve on the Company’s
Board of Directors until the 2010 Annual Meeting. Harold S. Edwards has been the president and
chief executive officer of Limoneira Company, an agricultural, real estate and community
development company, since November 2004 and has served as a director of the Company since April
2006. Mark H. Lazarus has been the president of Turner Entertainment Group since 2003 and has
served as a director of the Company since April 2006.
The Shareholders also approved an amendment to the Company’s Trust Agreement. Such amendment
provides that the Trust Agreement may be amended without shareholder approval so that the Trust
will be treated as a partnership for federal income tax purposes and authorizes the addition to the
Trust Agreement of any provisions that are customary, necessary or useful for an entity treated as
a partnership for federal income tax purposes.
Finally, at the meeting the Shareholders ratified the appointment of Grant Thornton LLP as
independent auditor for the Company for the fiscal year ending December 31, 2007.
On May 23, 2007 the Company amended its credit facility with a group of lenders led by Madison
Capital Funding LLC to increase the revolving loan commitment by $45 million. The expanded credit
facility now provides for $300 million in revolving loans, subject to borrowing base restrictions.
Invester Relations, Public Relations & Marketing Communications
About Compass Diversified Trust
CODI was formed to acquire and manage a group of profitable middle market businesses that are
headquartered in North America. CODI provides public investors with an opportunity to participate
in the ownership and growth of companies which have historically been owned by private equity firms
or wealthy individuals or families. CODI’s disciplined approach to its target market provides
opportunities to methodically purchase attractive businesses at values that are accretive to its
shareholders. For sellers of businesses, CODI’s unique structure allows CODI to acquire businesses
efficiently with no financing contingencies and, following acquisition, to provide its companies
with substantial access to growth capital.
Upon acquisition, CODI works with the executive teams of its subsidiary companies to identify and
capitalize on opportunities to grow those companies’ earnings and cash flows. These cash flows
support distributions to CODI shareholders, which are intended to be steady and growing over the
long term.
Subsidiary Businesses
Aeroglide Holdings, Inc.
and its consolidated subsidiaries, referred to as Aeroglide, is a
designer and manufacturer of industrial drying and cooling equipment, primarily used in the
production of a variety of human foods, animal and pet feeds, and industrial products. Aeroglide
is based in Cary, NC and was founded in 1940.
Anodyne Medical Device, Inc.
and its consolidated subsidiaries, referred to as AMD, is a
manufacturer of medical support surfaces and patient positioning devices, primarily used for the
prevention and treatment of pressure wounds experienced by patients with limited or no mobility.
AMD is based in Los Angeles, CA and was founded in 2005.
CBS Personnel Holdings, Inc.
and its consolidated subsidiaries, referred to as CBS Personnel, is a
provider of temporary staffing services in the United States. CBS Personnel is headquartered in
Cincinnati, OH, operates 144 branch locations in 18 states and was founded in 1970.
Compass AC Holdings, Inc.
and its consolidated subsidiary, referred to as Advanced Circuits, is a
manufacturer of low-volume quick-turn and prototype rigid printed circuit boards (“PCBs”).
Advanced Circuits is based in Aurora, CO and was founded in 1989.
Halo Lee Wayne LLC
and its consolidated subsidiaries, referred to as Halo, is a distributor of
customized promotional products and serves more than 30,000 customers as a one-stop-shop resource
for design, sourcing, management and fulfillment across all categories of its customers’
promotional products needs. Halo is based in Sterling, IL and was founded in 1952.
Silvue Technologies Group, Inc.
and its consolidated subsidiaries, referred to as Silvue, is a
developer and manufacturer of proprietary, high-performance coating systems for polycarbonate,
glass, acrylic, metals and other substrate materials used in the premium eyewear, aerospace,
automotive and industrial markets. Silvue is based in Anaheim, CA and was founded in 1986.
To find out more about Compass Diversified Trust, please visit www.compassdiversifiedtrust.com.
This press release may contain certain forward-looking statements, including statements with
regard to the future performance of CODI. Words such as “believes,” “expects,” “projects,” and
“future” or similar expressions are intended to identify forward-looking statements. These
forward-looking statements are subject to the inherent uncertainties in predicting future results
and conditions. Certain factors could cause actual results to differ materially from those
projected in these forward-looking statements, and some of these factors are enumerated in the risk
factor discussion in the Form 10K filed by CODI with the Securities and Exchange Commission for the
year ended December 31, 2006 and the Form 10Q filed by CODI for the quarter ended March 31, 2007
and other filings with the Securities and Exchange Commission. CODI undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
###