WESTPORT, Conn., Jan. 11, 2023 (GLOBE NEWSWIRE) -- Compass Diversified (NYSE: CODI) (“CODI” or the “Company”), an owner of leading middle market businesses, today announced it has entered into a definitive agreement (the “Agreement”) to sell its majority owned subsidiary, Compass AC Holdings, Inc., the parent company of Advanced Circuits, Inc. (“Advanced Circuits” or “the Company”), to APCT, Inc. (“APCT”), a leading manufacturer of high reliability printed circuit boards, and portfolio company of Industrial Growth Partners.

Under the terms of the Agreement, Advanced Circuits will be sold to APCT for an enterprise value of $220 million cash at close, subject to certain working capital and other adjustments. CODI expects to realize a pre-tax gain on the sale of Advanced Circuits of between $100 million to $110 million. Net proceeds will be used to pay off outstanding revolver borrowings.

Advanced Circuits had sales of about $90 million in 2022 and EBIDTA of about 30%, which would make the transaction worth about eight times EBIDTA. The combined company would make APCT competitive with Summit Interconnect for the second-largest PCB fabricator in the US, behind TTM.

“We partnered with John and Jeff Yacoub and the Advanced Circuits management team over sixteen years ago. They have been exceptional partners and friends over that period, and we are proud to have supported them as they built a true industry leader at Advanced Circuits,” said Elias Sabo, CEO of Compass Diversified. “We believe our permanent capital structure and the longer holding period it afforded CODI in this partnership helped create significant value for our shareholders. APCT represents the right partner for the Company in the next step of its journey and we wish them success.”

John Yacoub, CEO of Advanced Circuits, commented: “We are grateful for our partnership with the CODI team and are excited about Advanced Circuits’ opportunities ahead under new ownership. During our time with CODI, we have bolstered our market-leading position and pursued other areas of growth. We look forward to Advanced Circuits’ next chapter, and we’re confident that our partnership with APCT will enable us to further our position as an industry leader and deliver the high-quality products our customers expect. We thank the CODI team for their longstanding support.”

The closing of this transaction is subject to customary terms and conditions, including regulatory approval, and is expected to occur in February 2023.

Jefferies LLC acted as exclusive financial advisor and Ropes & Gray LLP acted as legal counsel to CODI. Kirkland & Ellis LLP acted as legal counsel to APCT.

About Compass Diversified

Since its founding in 1998, CODI has consistently executed on its strategy of owning and managing a diverse set of highly defensible, middle-market businesses across the niche industrial, branded consumer and healthcare sectors. The Company leverages its permanent capital base, long-term disciplined approach, and actionable expertise to maintain controlling ownership interests in each of its subsidiaries, maximizing its ability to impact long-term cash flow generation and value creation. The Company provides both debt and equity capital for its subsidiaries, contributing to their financial and operating flexibility. CODI utilizes the cash flows generated by its subsidiaries to invest in the long-term growth of the Company and has consistently generated strong returns through its culture of transparency, alignment and accountability. For more information, please visit compassdiversified.com.

Current Holdings：

About Advanced Circuits

Since 1989, With over 10,000 active customers， Advanced Circuits (also known in the industry as 4PCB) has been the leading the PCB industry as a quick turn manufacturer specializing in both small quantity PCBs and production quantities.  Advanced Circuits operates divisions in Aurora, CO, Chandler, AZ, and Maple Grove, MN and is ranked among the 3rd largest circuit board fabricators in North America.  Advanced Circuits is MIL-PRF-31032, MIL-PRF-55110G, AS9100C, ISO 9001:2008 Certified, IPC 6012 Class 2, 3 and 3A Qualified, as well as ITAR Registered.  They serve diverse industries that depend on their high quality printed circuit boards, delivered on-time. Their customers rely on them for the PCBs they need for military, aerospace, defense, medical and many more critical applications. Advanced Circuits is  one of the few PCB suppliers that is able to manufacture for DOD Contracts in the United States.

About APCT

APCT President / CEO, Steve Robinson, has been in the printed circuit board industry since 1971. After years of working as a top executive with a large global manufacturer of PCBs, he found that the culture there did not match his own values and decided to “get back to basics.”

In 2008, he acquired Advanced Printed Circuit Technology and formed the APCT we know today. Through acquisition, APCT is now one of the largest printed circuit board manufacturers in North America.

APCT is headquartered in Santa Clara, California, in the heart of the Silicon Valley. The company features four total manufacturing sites: Santa Clara, two in Southern California and one in Wallingford, Connecticut. Currently, the company has 180,000 sq. ft. of manufacturing space with over 500 employees.

The Categories of Technology：APCT has divided the technology world into Standard, Advanced, and Development. There are many attributes responsible for determining which category a board is placed. However, for the purposes of this overview, the following are offered:

⑴.Standard Technology：①.Through-Hole Technology up to 28 layers；②.HDI Technology up to 3 lamination cycles；③.Flex Technology up to 6 layers；④.Rigid Flex Technology up to 14 layers

⑵.Advanced Technology：①.Through-Hole Technology up to 38 layers；②.HDI Technology up to 5 lamination cycles；③.Flex Technology up to 10 layers；④.Rigid Flex Technology up to 24 layers

⑶.Development Technology：①.Through-Hole Technology up to 40+ layers；②.HDI Technology up to 7+ lamination cycles；③.Flex Technology up to 12+ layers；④.Rigid Flex Technology up to 26+ layers