Company: CODI-PB
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001345126-25-000015
Chunk: 96

Company: Compass Diversified Holdings
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1
Chunk 96
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Our permanent capital structure enables us to acquire, manage and grow attractive businesses that are leaders in their space. We actively invest in people, processes, and culture to support our business as we pursue disruptive growth opportunities and drive transformational change. We have two primary strategies that we use to support long-term value creation. First, we focus on growing the earnings and cash flow from our subsidiary businesses and help them professionalize at scale. We support our subsidiary companies’ growth initiatives and will work with our management teams to identify and acquire attractive add-on acquisitions that are consistent with their long-term strategies.  We believe that the scale and scope of our businesses give us a diverse base of cash flow upon which to further build. Second, we identify, perform due diligence on, negotiate and consummate additional platform acquisitions of small to middle market businesses in attractive industry sectors in accordance with acquisition criteria established by the Board.

Management Strategy

Our management strategy involves the proactive financial and operational management of the subsidiaries we own in order to increase cash flows and shareholder value. Our Manager actively oversees and supports the management teams of each of our subsidiaries by, among other things:

•recruiting and retaining talented managers to operate our businesses using structured incentive compensation programs, including non-controlling equity ownership, tailored to each business;

•regularly monitoring financial and operational performance, instilling consistent financial discipline, and supporting management in the development and implementation of information systems to effectively achieve these goals;

•identifying and aligning with external policy and performance tailwinds such as those influenced by growing climate, health, and social justice concerns (and similar environmental, social and governance ("ESG") drivers);

•assisting management in their analysis and pursuit of prudent organic growth strategies;

•identifying and working with management to execute attractive external growth and acquisition opportunities;

•assisting management in controlling and right-sizing overhead costs;

•nurturing an internal culture of transparency, alignment, accountability and governance, including regular reporting; 

•professionalizing our subsidiaries at scale; and

•forming strong subsidiary level boards of directors to supplement management in their development and implementation of strategic goals and objectives.

Specifically, while our businesses have different growth opportunities and potential rates of growth, we expect our Manager to work with the management teams of each of our businesses to increase the value of, and cash generated by, each business through various initiatives, including:

•making selective capital investments to expand geographic reach, increase capacity, or reduce manufacturing costs of our businesses;

•investing in product research and development for new products, processes