Business Description

Company Background Compass Diversified Holdings, a Delaware statutory trust, was formed in Delaware on November 18, 2005. Compass Group Diversified Holdings, LLC, a Delaware limited liability company, was also formed on November 18, 2005. The Trust and the LLC were formed to acquire and manage a group of small and middle-market businesses headquartered in North America. The Trust is the sole owner of 100% of the Trust Interests, as defined in our LLC Agreement, of the LLC. Pursuant to the LLC Agreement, the Trust owns an identical number of Trust Interests in the LLC as exist for the number of outstanding shares of the Trust. The Trust was previously treated as a partnership for U.S. federal income tax purposes but elected, effective September 1, 2021, to be taxed as an association taxable as a corporation. The LLC is the operating entity with a board of directors (the "Board") whose corporate governance responsibilities are similar to that of a Delaware corporation. The LLC’s Board oversees the management of the Company and our businesses and the performance of our Manager. Certain persons who are employees, former employees or members of our Manager receive a profit allocation as beneficial owners (through Sostratus LLC ) of th e Allocation Interests, as defined in our LLC Agreement. Overview We acquire controlling interests in and actively manage our subsidiaries that we believe (i) operate in industries with long-term macroeconomic growth opportunities, (ii) have positive and stable cash flows, (iii) face minimal threats of technological or competitive obsolescence, and (iv) have strong management teams largely in place. We offer investors a unique opportunity to own a diverse group of leading middle-market businesses in the branded-consumer and industrial sectors. Our disciplined approach to our target markets provides opportunities to methodically acquire and manage attractive businesses that will create value for our shareholders. For sellers of businesses, our unique financial structure allows us to purchase businesses efficiently with fewer third-party financing contingencies and, following acquisition, to provide our businesses with access to growth capital. In addition, our permanent capital model generally allows us to acquire businesses at any point across economic cycles, ensuring that we are able to act quickly when the opportunity presents itself, even when markets are volatile. Private company operators and corporate parents looking to sell their business units may consider us an attractive purchaser because of our ability to: • provide ongoing strategic and financial support for their businesses, including professionalization of our subsidiaries at scale; • maintain a long-term outlook as to the ownership of those businesses; • sustainably invest in growth capital and/or add-on acquisitions where appropriate; and • consummate transactions efficiently without being dependent on third-party transaction financing. In particular, our long-term approach and our active management may alleviate the concern that many private company operators and parent companies may have with regard to their businesses going through multiple sale processes in a short period of time. We believe our approach enhances our ability to develop a comprehensive strategy to grow the earnings and cash flows of each of our businesses. Finally, it has been our experience, that our ability to acquire businesses without the cumbersome delays and conditions typical of third-party transactional financing is appealing to sellers of businesses who are interested in confidentiality, speed and certainty of close. Our management team’s strong relationships with industry executives, accountants, attorneys, business brokers, commercial and investment bankers, and other potential sources of acquisition opportunities offer us opportunities to assess small to middle market businesses available for acquisition. In addition, the flexibility, creativity, experience and expertise of our management team in structuring transactions allows us to consider non-traditional and complex transactions tailored to fit a specific acquisition target. 8 We categorize the current businesses we own into two separate groups: (i) branded consumer businesses and (ii) industrial businesses. Branded consumer businesses are those businesses that we believe capitalize on a valuable brand name in their respective market sector.…