Company: CODI-PB
Filing Date: 2025-12-08
Form Type: 10-K/A
Source: 0001345126-25-000078
Chunk: 22

Company: Compass Diversified Holdings
Filing Date: 2025-12-08
Form: 10-K/A
Chunk 22
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We acquire and actively manage small and middle market businesses. We characterize small to middle market businesses as those that generate annual cash flows of up to $100 million per year. We believe that the acquisition market for these businesses is highly fragmented and often provides opportunities to purchase at more attractive prices and achieve better outcomes for our shareholders. We believe this is driven by the following factors:

• third-party financing for these acquisitions is often less available or terms are less favorable for the borrower;

• sellers of these businesses frequently consider non-economic factors, such as legacy or the effect of the sale on their employees;

• these businesses are more likely to be sold outside of an auction process or as part of a limited process; and

• "add-on" acquisitions can often be completed at attractive multiples of cash flow.

Frequently, opportunities exist to support and augment existing management at such businesses and improve the performance of these businesses upon their acquisition through active management. We are business builders rather than asset traders. In the past, our management team has acquired businesses that were owned by entrepreneurs or large corporate parents. In these cases, our management team has frequently found opportunities to profitably invest in areas of the acquired businesses beyond levels that existed at the time of acquisition. In addition, our management team has frequently found that processes such as financial reporting and management information systems of acquired businesses may be improved, leading to improvements in reporting and operations and ultimately earnings and cash flow. Finally, our management team often acts as a business development arm for our businesses to pursue organic or external growth strategies that may not have been pursued by their previous owners.

#### Our Strategy
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

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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.