Resolute Holdings I, LP and its affiliated vehicles (“Resolute”),
an investment firm under the leadership of David Cote and Tom
Knott, and CompoSecure, Inc. (Nasdaq: CMPO) (“CompoSecure” or the
“Company”), a leader in metal payment cards, security, and
authentication solutions, today announced that certain shareholders
of CompoSecure have entered into Stock Purchase Agreements
(collectively, the “SPA”) with Resolute, pursuant to which Resolute
will acquire a majority interest in CompoSecure and eliminate its
dual-class structure.
The David Cote Family is investing $372 million
through Resolute and Dave Cote will become the executive chairman
of the board of directors of CompoSecure upon closing of the
transaction. Resolute will become the majority shareholder of the
Company and will focus on deploying operational and M&A best
practices to drive long-term value creation for all shareholders.
Importantly, the transaction will remove the dual-share structure,
delivering higher retained annual cash flow and better alignment of
all shareholders with the elimination of the tax distributions
related to the Class B units.
David Cote said, “CompoSecure meets all the
criteria I look for when making an investment and I am thrilled
that Resolute will become the Company’s majority shareholder.
CompoSecure has a high-quality management team led by CEO Jon Wilk,
a leading market position in its industry, attractive long-term
growth prospects, technological differentiation, and robust free
cash flow generation. Tom and I see significant opportunity to
continue growing CompoSecure while also diversifying the business
and customer base through incremental M&A. In our view, it is
the perfect first investment for Resolute and we are excited to get
started creating additional shareholder value.”
CompoSecure CEO, Jon Wilk said, “I am very
pleased to announce this strategic transaction that will simplify
our corporate structure and continue to unlock shareholder value. I
am also thrilled to have David Cote serve as executive chairman of
the board of directors. David’s career and track record is
unparalleled, setting the standard for how organizations can
simultaneously drive both short and long-term performance to
realize their full potential. We believe his experience steering
global organizations, such as Honeywell and Vertiv, will be
invaluable to CompoSecure as we enter a new phase of growth and
value creation for shareholders, employees, and customers.”
Mitchell Hollin, Partner at LLR Partners, a
long-term CompoSecure Class B stockholder, added, “LLR is grateful
to have been part of CompoSecure’s growth since our investment in
the company in 2015. Michele Logan, Jon and the rest of the
CompoSecure team have built a market leader that I believe is well
positioned for the long-term. We look forward to seeing
CompoSecure’s continued success in partnership with David, Tom and
Resolute.”
The Stock Purchase
Agreements
Under the terms of the SPA, the selling
shareholders will exchange the entirety of their Class B units and
associated Class B shares for Class A shares, eliminating the
current dual-share class structure. Resolute will subsequently
purchase 49.3 million of the corresponding Class A shares to
acquire majority control of the Company. As a result of the
transaction, The David Cote Family is expected to have voting
control of approximately 60% of total shares outstanding as of the
closing date.
The Company’s current management team, including
Jon Wilk, CompoSecure’s chief executive officer, are expected to
continue in their current roles at the Company, while the board of
directors will include the appointment of Dave Cote, Tom Knott and
other representatives from Resolute to replace Mitchell Hollin, of
LLR Partners, and Michele Logan, co-founder of CompoSecure, who
will depart from the board of directors upon closing of the
transaction. Upon closing of the transaction, the size of the board
will be expanded to eleven members, and a majority of the Board
will be independent directors.
Goldman Sachs & Co. LLC is serving as
financial advisor to Resolute, and Paul, Weiss, Rifkind,
Wharton & Garrison LLP is serving as legal advisor.
A special committee of CompoSecure’s Board of
Directors, which is comprised solely of independent directors and
was formed in connection with the transaction (the “Special
Committee”), after receiving advice from an independent legal
counsel and financial advisor, unanimously approved the proposed
transactions to which CompoSecure is a party. The Special Committee
was advised by Potter Anderson & Corroon LLP (Wilmington, DE)
and Houlihan Lokey, Inc.
The transaction is expected to close by
September 30, 2024, subject to customary closing conditions and
regulatory approvals, including Hart-Scott-Rodino clearance.
About Resolute Holdings
Resolute Holdings is an investment firm,
controlled by Dave Cote, former CEO of Honeywell International,
Inc. (“Honeywell”) and current Executive Chairman of Vertiv
Holdings Co (“Vertiv”), and Tom Knott, former Head of Permanent
Capital Strategies at The Goldman Sachs Group, Inc. (“Goldman
Sachs”). Mr. Cote and Mr. Knott formed Resolute Holdings to invest
in businesses that can benefit from the systematic deployment of
the operating system Mr. Cote has developed over his career.
Mr. Cote completed approximately 170 M&A
transactions during his tenure as CEO of Honeywell and as current
Executive Chairman at Vertiv. Mr. Cote brings over 40 years of
operating experience across a wide range of industrial sectors with
a proven track record of delivering outsized shareholder value
through disciplined portfolio management and accretive M&A.
Mr. Knott was formerly the Head of Permanent
Capital Strategies in the Asset Management Division of Goldman
Sachs and was also CEO of GS Acquisition Holdings Corp and GS
Acquisition Holdings Corp II, respectively bringing public both
Vertiv and Mirion Technologies, Inc. Mr. Knott brings over 14 years
of investing experience across a wide range of sectors.
About CompoSecure
Founded in 2000, CompoSecure is a technology
partner to market leaders, fintech’s and consumers enabling trust
for millions of people around the globe. The company combines
elegance, simplicity and security to deliver exceptional
experiences and peace of mind in the physical and digital world.
CompoSecure’s innovative payment card technology and metal cards
with Arculus security and authentication capabilities deliver
unique, premium branded experiences, enable people to access and
use their financial and digital assets, and ensure trust at the
point of a transaction. For more information, please
visit www.CompoSecure.com and www.GetArculus.com.
Contacts
For Resolute Holdings
Tom Knottinfo@resoluteholdings.com
For CompoSecure
Anthony PiniellaHead of Communications (917)
208-7724apiniella@composecure.com
Sean Mansouri, CFAElevate IR(720)
330-2829CMPO@elevate-ir.com
Forward-Looking Statements
This press release contains forward-looking
statements as defined by the Private Securities Litigation Reform
Act of 1995. These statements are based on the beliefs and
assumptions of management or Resolute Holdings, as appliable.
Although CompoSecure and Resolute Holdings, as applicable, believes
that its plans, intentions, and expectations reflected in or
suggested by these forward-looking statements are reasonable,
CompoSecure, Resolute Holdings and their affiliates cannot assure
you that it will achieve or realize these plans, intentions, or
expectations. Forward-looking statements are inherently subject to
risks, uncertainties, and assumptions. Generally, statements that
are not historical facts, including statements concerning
CompoSecure’s or Resolute Holdings’ possible or assumed future
actions, business strategies, events, or results of operations, are
forward-looking statements. In some instances, these statements may
be preceded by, followed by or include the words “believes,”
“estimates,” “expects,” “projects,” “forecasts,” “may,” “will,”
“should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends”
or the negatives of these terms or variations of them or similar
terminology. Forward-looking statements are not guarantees of
performance. You should not put undue reliance on these statements
which speak only as of the date hereof. You should understand that
the following important factors, among others, could affect
CompoSecure’s future results and could cause those results or other
outcomes to differ materially from those expressed or implied in
these forward-looking statements: the ability to consummate the
transactions contemplated by the SPA; the ability of CompoSecure to
diversify its business and customer base; the ability of
CompoSecure to create value for its shareholders and generate
robust free cash flow; the ability of CompoSecure to grow and
manage growth profitably, maintain relationships with customers,
compete within its industry and retain its key employees; the
possibility that CompoSecure may be adversely impacted by other
global economic, business, competitive and/or other factors; the
outcome of any legal proceedings that may be instituted against
CompoSecure, Resolute Holdings or others; future exchange and
interest rates; and other risks and uncertainties, including those
under “Risk Factors” in filings that have been made or will be made
with the Securities and Exchange Commission. CompoSecure and
Resolute Holdings undertake no obligations to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
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