Compass Diversified Holdings, parent company of CamelBak and many other mid-market firms, has entered into an agreement to acquire Fresh Hemp Foods Ltd. (“Manitoba Harvest”). The acquisition is expected to close in the next 45 days, subject to customary closing conditions.
Headquartered in Winnipeg, Manitoba, Manitoba Harvest’s products are currently carried in about 7,000 retail stores across the U.S. and Canada. For the year ended November 30, 2014, Manitoba Harvest reported net revenue of approximately C$37.9 million, an increase of 23.9% year-over-year. The company continued its rapid growth in the first half of its current fiscal year, generating net revenue of approximately C$27.6 million for the six months ended May 31, 2015.
The purchase price for Manitoba Harvest is based on a total enterprise value of C$132.5 million and will also include working capital and certain other adjustments upon closing. Manitoba Harvest generated net revenues of approximately C$44.9 million and Adjusted EBITDA of approximately C$6.4 million for the last 12 months ending May 31, 2015, representing year-over-year growth of 28.5% and 59.4%, respectively. The company generated Adjusted EBITDA for the six months ended May 31, 2015 of approximately C$5.0 million.
CODI’s initial equity ownership in Manitoba Harvest as a result of the transaction will be approximately 87% on a primary basis. Mike Fata, CEO of Manitoba Harvest; Clif White Road Investments LLC, an existing shareholder; and certain other management team members will re-invest alongside CODI. Lazard Middle Market will act as the exclusive financial advisor to Manitoba Harvest.
