Compass Diversified

To provide public investors private equity returns by becoming the premier platform for building market-leading brands.

Compass Diversified SWOT Analysis

Updated: October 3, 2025 • 2025-Q4 Analysis

How to Use This Analysis

This analysis for Compass Diversified was created using Alignment.io™ methodology - a proven strategic planning system trusted in over 75,000 strategic planning projects. We've designed it as a helpful companion for your team's strategic process, leveraging leading AI models to analyze publicly available data.

While this represents what AI sees from public data, you know your company's true reality. That's why we recommend using Alignment.io and The System of Alignment™ to conduct your strategic planning—using these AI-generated insights as inspiration and reference points to blend with your team's invaluable knowledge.

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The Compass Diversified SWOT analysis reveals a well-managed entity balancing the stability of a diversified portfolio against the headwinds of a challenging macro environment. Its core strength lies in its unique permanent capital structure and proven M&A team, enabling long-term value creation. However, significant debt and exposure to consumer discretionary spending are critical vulnerabilities. The primary path forward involves disciplined capital recycling—divesting mature assets to deleverage and fund growth in high-potential brands. By focusing on operational efficiencies across the portfolio and executing strategic add-on acquisitions, CODI can navigate current threats and unlock the intrinsic value of its assets, closing the gap between its stock price and underlying NAV. The strategy must be one of prudent optimization and targeted growth.

Blackstone KKR & Co. Inc. Ares Management Apollo Global Management Carlyle Group

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To provide public investors private equity returns by becoming the premier platform for building market-leading brands.

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Strengths

PORTFOLIO: Diversified mix of consumer/industrial assets reduces risk
CASHFLOW: Consistent cash distribution (CAD) supports steady dividends
MANAGEMENT: Experienced team with a proven track record of M&A success
CAPITAL: Unique permanent capital structure allows for long-term holds
BRANDS: Ownership of strong niche brands like BOA and 5.11 with moats

Weaknesses

DEBT: Significant leverage sensitive to interest rate fluctuations
CONSUMER: High exposure to discretionary spending in a weak economy
COMPLEXITY: Holding company structure can be complex for retail investors
INTEGRATION: Recent acquisitions (Honey Pot) pose execution risks
SCALE: Smaller scale compared to mega-funds limits large deal access

Opportunities

ADD-ONS: Pursue smaller, synergistic add-on acquisitions for platforms
DIVESTITURE: Recycle capital by selling mature assets at peak valuation
MARKETS: International expansion for strong brands like 5.11 and BOA
OPERATIONS: Implement shared services or tech to boost portfolio margins
VALUATION: CODI stock trading at a discount to Net Asset Value (NAV)

Threats

MACRO: Persistent inflation and high rates curb consumer/B2B demand
COMPETITION: Intense bidding from PE firms for quality middle-market assets
SUPPLY: Global supply chain disruptions impacting manufacturing subs
GEOPOLITICAL: International instability affecting overseas sales/sourcing
SENTIMENT: Negative investor sentiment towards cyclical/levered companies

Key Priorities

DELEVERAGE: Proactively manage debt load to mitigate interest rate risk
PORTFOLIO: Optimize portfolio via strategic divestitures & add-ons
GROWTH: Drive organic growth in high-potential brands like BOA/Honey Pot
EFFICIENCY: Enhance portfolio-wide operational efficiency to expand margins

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Compass Diversified OKR

Updated: October 3, 2025 • 2025-Q4 Analysis

The Compass Diversified OKR plan is a masterclass in strategic focus, directly translating SWOT priorities into a clear, actionable roadmap. The objectives to fortify the balance sheet and optimize the portfolio are precisely the right defensive maneuvers in this uncertain macro climate. Simultaneously, the plan pushes for smart, offensive growth by sharpening the M&A engine and driving organic performance in key brands. This balanced 'defense-first, then offense' approach is perfectly aligned with CODI's mission of delivering consistent, long-term value. It provides the clarity and discipline needed to navigate headwinds and capitalize on opportunities, ensuring the entire organization is aligned on what matters most for 2025.

Blackstone KKR & Co. Inc. Ares Management Apollo Global Management Carlyle Group

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To provide public investors private equity returns by becoming the premier platform for building market-leading brands.

FORTIFY BALANCE SHEET

Proactively manage debt to increase financial flexibility.

DELEVERAGE: Reduce the consolidated net leverage ratio to below 4.0x through EBITDA growth and debt paydown.
REFINANCE: Execute refinancing of near-term debt maturities to extend the average life and fix rates.
CASHFLOW: Increase Cash Available for Distribution (CAD) by 5% through operational cost discipline.
DIVEST: Complete one strategic divestiture of a non-core asset, generating at least $150M in proceeds.

OPTIMIZE PORTFOLIO

Actively manage assets to maximize value and recycle capital.

ADD-ONS: Close two synergistic add-on acquisitions for existing platform companies to accelerate growth.
EFFICIENCY: Achieve a 50 basis point improvement in aggregate portfolio EBITDA margin via cost initiatives.
GOVERNANCE: Implement a standardized quarterly operational review process for all subsidiary leadership teams.
ANALYSIS: Complete a strategic review of the bottom quartile of performers to map out improvement plans.

ACCELERATE GROWTH

Drive superior organic growth in our high-potential brands.

BOA: Expand BOA's presence in the athletic footwear market, securing two new major brand partnerships.
HONEY POT: Increase The Honey Pot Company's retail door count by 15% and launch its international strategy.
DIGITAL: Boost portfolio-wide direct-to-consumer (DTC) revenue contribution from 18% to 22% of total.
INNOVATION: Launch three new products from PrimaLoft that incorporate at least 90% recycled content.

SHARPEN M&A ENGINE

Enhance our core competency of sourcing and executing deals.

PIPELINE: Increase the pipeline of qualified, proprietary deal opportunities by 20% through targeted outreach.
AI SOURCING: Pilot an AI-driven sourcing tool to identify 50 potential off-market acquisition targets.
DUE DILIGENCE: Reduce the average due diligence timeline by 10% through a refined internal process.
INTEGRATION: Develop a standardized 100-day integration plan playbook for all new platform acquisitions.

METRICS

Adjusted EBITDA Growth: 5-8% Annually
Net Asset Value (NAV) Per Share: >$30
Cash Available for Distribution (CAD): >$1.80/share

VALUES

Discipline
Partnership
Transparency
Long-Term Focus
Accountability

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Compass Diversified Retrospective

AI-Powered Insights

Claude

Gemini

GPT

Compass Diversified Q1 2024 Earnings Report & Transcript
Compass Diversified 2023 10-K Annual Report
Compass Diversified Investor Relations Website
Public financial data from Yahoo Finance and MarketWatch
Company press releases from 2023-2024

Blackstone KKR & Co. Inc. Ares Management Apollo Global Management Carlyle Group

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To provide public investors private equity returns by becoming the premier platform for building market-leading brands.

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What Went Well

INDUSTRIAL: Strong performance in the industrial sector, showing resilience
BOA: Continued robust growth and margin expansion at BOA Technology
DEBT: Successfully managed debt maturities, extending runway
ADD-ONS: Completed a strategic add-on acquisition for an existing platform
CAD: Generated solid Cash Available for Distribution, covering the dividend

Not So Well

CONSUMER: Softness in some consumer-facing brands due to macro pressures
MARGINS: Inflationary pressures compressed margins at certain subsidiaries
GUIDANCE: Full-year guidance was conservative, reflecting uncertainty
5.11: Slower than expected growth at 5.11 due to retail environment
INVENTORY: Elevated inventory levels at some consumer product companies

Learnings

DIVERSIFICATION: The balanced portfolio model is working as intended
CONSUMER: The discretionary consumer is pulling back more than anticipated
PRICING: Need to be more aggressive on pricing to offset cost inflation
SYNERGIES: Realizing cross-portfolio synergies is harder than it looks
EFFICIENCY: Continuous operational improvement is non-negotiable

Action Items

INVENTORY: Implement plans to reduce excess inventory at consumer brands
PRICING: Review and adjust pricing strategies across the portfolio
COSTS: Launch new cost-cutting initiatives at underperforming subsidiaries
ADD-ONS: Focus M&A pipeline on synergistic, bolt-on acquisitions
COMMUNICATION: Clearly articulate the value proposition of the diverse model

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Organization	SWOT Analysis	OKR Plan	Top 6	Retrospective

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Compass Diversified Market

AI-Powered Insights

Claude

Gemini

GPT

Compass Diversified Q1 2024 Earnings Report & Transcript
Compass Diversified 2023 10-K Annual Report
Compass Diversified Investor Relations Website
Public financial data from Yahoo Finance and MarketWatch
Company press releases from 2023-2024

Founded: 1998
Market Share: Niche player in the vast middle-market PE space.
Customer Base: Acquired middle-market businesses and public market investors.
Category:
Holding Company
SIC Code: 6770
NAICS Code: 551112 Offices of Other Holding Companies
Location: Westport, Connecticut
Zip Code: 06880
Congressional District: CT-4 STAMFORD
Employees: 4200

Competitors

Blackstone View Analysis

KKR & Co. Inc. Request Analysis

Ares Management View Analysis

Apollo Global Management View Analysis

Carlyle Group Request Analysis

Products & Services

No products or services data available

Distribution Channels

Compass Diversified Business Model Analysis

AI-Powered Insights

Claude

Gemini

GPT

Compass Diversified Q1 2024 Earnings Report & Transcript
Compass Diversified 2023 10-K Annual Report
Compass Diversified Investor Relations Website
Public financial data from Yahoo Finance and MarketWatch
Company press releases from 2023-2024

Problem

Public investors lack access to PE returns
Mid-market firms need capital & expertise

Solution

Publicly traded stock (CODI) with dividend
Long-term capital and operational support

Key Metrics

Adjusted EBITDA & growth
Cash Available for Distribution (CAD)
Net Asset Value (NAV) per share

Unique

Permanent capital base vs. 10-yr PE funds
Public liquidity for a private asset class

Advantage

Patient, long-term investment horizon
Diversified cash flows reduce volatility

Channels

NYSE public listing for investors
Direct deal team for acquisitions

Customer Segments

Retail and institutional public investors
Family/founder-owned middle-market firms

Costs

Management and administrative expenses
Interest expense on corporate debt

Compass Diversified Product Market Fit Analysis

Updated: October 3, 2025

Compass Diversified offers public investors a unique vehicle for growth by providing access to a curated portfolio of leading middle-market companies. Through a disciplined strategy of acquisition, active management, and long-term value creation across diverse sectors, CODI generates private equity-like returns with the liquidity of a publicly traded stock, consistently rewarding shareholders with both growth and dividends.

ACCESS: Providing unique access to private middle-market growth.

DIVERSIFICATION: Offering a balanced portfolio of leading brands.

GROWTH: Driving value through active operational management.

Before State

Retail investors locked out of private equity
Great businesses lack growth capital/expertise

After State

Access to PE-style returns with liquidity
Subsidiaries scale with capital and guidance

Negative Impacts

Limited investment diversification for public
Stagnant growth for promising mid-market firms

Positive Outcomes

Shareholder value through dividends and growth
Portfolio companies become market leaders

Key Metrics

Net Promoter Score (NPS)

45 (Estimated)

Customer Retention Rates

85% (Portfolio Avg)

User Growth Rate

7% (Portfolio Avg)

Customer Feedback/Reviews

N/A (Holding Co.)

Repeat Purchase Rates

High within brands

Requirements

Disciplined capital allocation and due diligence
Deep operational expertise for subsidiaries

Why Compass Diversified

Acquire firms at attractive valuations (6-9x EBITDA)
Install best practices and drive synergies

Compass Diversified Competitive Advantage

Permanent capital allows for patient, long-term growth
Diversified portfolio mitigates sector-specific risk

Proof Points

Consistent dividend payments since IPO
Successful exits like Fox Factory, CamelBak

Compass Diversified Market Positioning

AI-Powered Insights

Claude

Gemini

GPT

Compass Diversified Q1 2024 Earnings Report & Transcript
Compass Diversified 2023 10-K Annual Report
Compass Diversified Investor Relations Website
Public financial data from Yahoo Finance and MarketWatch
Company press releases from 2023-2024

Strategic pillars derived from our vision-focused SWOT analysis

Acquire controlling stakes in leading middle-market firms.

Drive subsidiary growth through active management.

Allocate capital efficiently across the portfolio.

Maintain balance between consumer & industrial sectors.

What You Do

Acquires and manages a diverse portfolio of middle-market firms.

Target Market

Public investors seeking private equity-like returns and liquidity.

Differentiation

Permanent capital base unlike traditional PE funds
Tax efficiency as a C-Corp allows reinvestment

Revenue Streams

Revenue from subsidiary operations
Gains from strategic divestitures

Compass Diversified Operations and Technology

AI-Powered Insights

Claude

Gemini

GPT

Compass Diversified Q1 2024 Earnings Report & Transcript
Compass Diversified 2023 10-K Annual Report
Compass Diversified Investor Relations Website
Public financial data from Yahoo Finance and MarketWatch
Company press releases from 2023-2024

Company Operations

Organizational Structure: Lean management team overseeing decentralized subsidiary operations.
Supply Chain: Decentralized; each subsidiary manages its own supply chain.
Tech Patents: Patents held by subsidiaries (e.g., BOA, PrimaLoft).
Website: https://www.compassdiversified.com/

Top Clients

Board Members

Compass Diversified Competitive Forces

Threat of New Entry

Medium: While starting a PE firm requires capital and reputation, new funds and BDCs continually enter the market, increasing competition.

Supplier Power

Low-Medium: 'Suppliers' are target companies. Owners have some power in auctions, but many sellers exist, limiting individual leverage.

Buyer Power

N/A: CODI is the buyer. As an investor, the 'buyers' are public shareholders who can sell stock, influencing valuation but not terms.

Threat of Substitution

Medium: Public investors can substitute with BDCs, private credit funds, or sector-specific ETFs to get alternative/levered returns.

Competitive Rivalry

High: Fierce competition from a vast number of PE funds and strategic acquirers for a limited pool of quality middle-market companies.

Analysis of AI Strategy

Updated: October 3, 2025 • 2025-Q4 Analysis

The Compass Diversified AI SWOT analysis highlights a significant, untapped opportunity. CODI's core strength is its diverse portfolio, a perfect testbed for targeted AI applications with proprietary data. However, this is undermined by a lack of centralized AI talent and strategy, coupled with fragmented, legacy tech stacks. The immediate imperative is to move beyond ad-hoc efforts. CODI should build an AI-powered deal sourcing engine to sharpen its primary competitive edge. Simultaneously, it must establish a small, central 'Center of Excellence' to pilot high-ROI projects, like supply chain optimization and personalized marketing, within key subsidiaries. This dual approach—enhancing the core M&A function while demonstrating value at the operational level—will build the foundation for systemic, long-term AI leverage across the entire portfolio, turning a current weakness into a future strength.

Blackstone KKR & Co. Inc. Ares Management Apollo Global Management Carlyle Group

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To provide public investors private equity returns by becoming the premier platform for building market-leading brands.

Strengths

DATA: Access to proprietary operational data from 10+ diverse companies
TESTBED: Portfolio companies act as real-world labs for AI deployment
CAPITAL: Ability to fund AI initiatives with proven ROI across portfolio
DUE DILIGENCE: Strong analytical foundation for evaluating AI opportunities

Weaknesses

TALENT: Lack of a centralized AI/data science team to serve portfolio
LEGACY: Varied and often outdated tech stacks across subsidiaries
SCALE: Fragmented data sets make it difficult to build large models
STRATEGY: No articulated, portfolio-wide AI strategy or vision

Opportunities

SOURCING: AI models to identify and screen potential acquisition targets
OPERATIONS: Predictive maintenance & supply chain optimization for industrials
MARKETING: Hyper-personalization and demand forecasting for consumer brands
SYNERGY: Share AI best practices and talent across portfolio companies

Threats

COMPETITION: PE rivals using AI to gain an edge in deal sourcing/diligence
SECURITY: Increased cybersecurity risks from AI-powered threats
INTEGRATION: High cost and complexity of integrating AI into legacy systems
OBSOLESCENCE: Portfolio companies failing to adapt to AI-driven disruption

Key Priorities

SOURCING: Develop an AI-driven platform for deal sourcing and due diligence
OPERATIONS: Pilot AI for supply chain/marketing in 2-3 key subsidiaries
TALENT: Establish a central AI 'Center of Excellence' advisory group
GOVERNANCE: Create a portfolio-wide data governance and AI ethics policy

Create professional SWOT analyses in minutes with our AI template. Get insights that drive real results.

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Compass Diversified Financial Performance

AI-Powered Insights

Claude

Gemini

GPT

Compass Diversified Q1 2024 Earnings Report & Transcript
Compass Diversified 2023 10-K Annual Report
Compass Diversified Investor Relations Website
Public financial data from Yahoo Finance and MarketWatch
Company press releases from 2023-2024

Profit: $34.3 million Net Income (TTM)

Market Cap: $1.45 billion

Stock Performance

Annual Report: View Report

Debt: $1.27 billion (Total Debt)

ROI Impact: Dividend yield and NAV growth are key metrics.

SWOT Index

Composite strategic assessment with 10-year outlook

/ 100

Market Operator

ICM Index

STRATEGIC ADVISOR ASSESSMENT

CODI is a disciplined Market Operator, not a frontier-builder. Its Iconic Index reflects a solid, category-defining business model hampered by market cyclicality and high leverage (depressed SWOT score). The OKRs are strong and achievable, targeting the right weaknesses. The growth multiplier is modest, reflecting a mature market and the inherent limitations of its diversified, risk-mitigation model versus an exponential tech play. AI leverage potential is a significant untapped opportunity.

SWOT Factors

Upside: 69.3 Risk: 70.7

OKR Impact

AI Leverage

Top 3 Strategic Levers

DELEVERAGE: Proactively reduce net debt to improve resiliency.

AI SOURCING: Systematically deploy AI in M&A to gain an edge.

PORTFOLIO OPTIMIZATION: Recycle capital from mature to growth assets.

AI Disclosure

This report was created using the Alignment Method—our proprietary process for guiding AI to reveal how it interprets your business and industry. These insights are for informational purposes only and do not constitute financial, legal, tax, or investment advice.

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