Compass Diversified to Sell Sterno Food Service for $292.5M, Reduce Leverage Below 1.0x
Compass Diversified will sell Sterno’s food service business to Archer Foodservice Partners for $292.5 million, with 2025 adjusted EBITDA of approximately $30.3 million. Net proceeds will repay senior secured debt and drive its senior secured net leverage ratio below 1.0x, eliminating excess leverage fees after June 30, 2026.
1. Transaction Terms
Compass Diversified has agreed to sell the food service business of SternoCandleLamp Holdings for an enterprise value of $292.5 million to Archer Foodservice Partners, subject to customary working capital and other adjustments. The business generated approximately $30.3 million in subsidiary adjusted EBITDA in 2025, inclusive of certain shared overhead expenses that will remain post-closing.
2. Deleveraging Impact
Net proceeds from the sale will be applied to repay senior secured indebtedness, reducing the company’s senior secured net leverage ratio to below 1.0x. This reduction will allow CODI to avoid fees associated with excess leverage under its senior secured credit facility beyond June 30, 2026.
3. Post-Deal Operations
Following the transaction, Compass Diversified will retain Sterno’s home fragrance business, operating under the Rimports name. Headquartered in Provo, Utah, Rimports manufactures and distributes branded and private-label home fragrance products.
4. Closing and Outlook
The transaction is expected to close in May 2026 upon satisfaction of customary closing conditions and regulatory approvals. This divestiture advances CODI’s strategy of strategic business sales and balance sheet optimization to unlock intrinsic value.