Compass Diversified, former parent of Newport Beach-based Lugano, today announced that it’s selling its portable food warming systems subsidiary Sterno to Archer Foodservice Partners for $292.5 million.
Shares in Compass were up 14% to $7.59 apiece and a $571 million market cap (NYSE: CODI) on news of the transaction.
“This transaction is a critical step in reducing leverage at CODI and reflects our commitment to taking decisive action — strategically selling businesses, rapidly deleveraging the balance sheet and addressing the gap between the market price and our intrinsic value,” Compass Chief Executive Elias Sabo said in a statement.
Sterno is one of Compass’ eight subsidiaries including Primaloft for apparel insulation and AMT for aerospace products. Compass is also the parent of Costa Mesa-based 5.11 Tactical, which has 165 employees in Orange County.
Compass said it plans to use the net proceeds from the sale, which is expected to close in May, to repay outstanding debt.
