Foam Fabricators Inc. is being acquired by a publicly traded company that lives up to its name.
Compass Diversified Holdings, which trades on the New York Stock Exchange, is buying the maker of custom molded products made from expanded polystyrene and expanded polypropylene for nearly $250 million.
The Scottsdale, Ariz.-based Foam Fabricators has 13 manufacturing sites across North America.
Compass Diversified CEO Alan Offenberg called Foam Fabricators "an attractive platform acquisition," in a statement announcing the deal.
"This platform acquisition will be immediately accretive and will enable us to continue growing our cash flow and provide attractive and stable distributions," he continued.
Foam Fabricators joins a varied stable of companies owned by Compass Diversified, including Sterno, the portable food warming fuel that campers and caterers know well. Other portfolio companies include: Crosman, a maker of air guns and archery products; Advanced Circuits, a maker of printed circuit boards; and Manitoba Harvest, a maker of hemp-based food products.
The company is paying $247.5 million to Foam Fabricators owner Warren "Budd" Florkiewicz in a deal expected to close within 45 days.
"Foam Fabricators possesses the key characteristics that we look for in all our subsidiaries: a strong management team, a diversified customer base; strong free cash flow; and attractive growth prospects," said Compass Diversified CEO-elect Elias Sabo in a statement.
James Hughes, currently president of Foam Fabricators, will become CEO.
"CODI provides the financial stability and experience to allow us to continue to meet the needs of our customers, employees and stakeholders. We are eager to leverage CODI's financial resources and proven expertise in growing middle market companies to build upon our 60-year history," he said in a statement.
Foam Fabricators posted sales of about $126 million, and earnings before interest, tax, depreciation and amortization of about $30 million for the year ended Nov. 30.
End markets for the company's products include appliances, electronics, pharmaceuticals, health and wellness, automotive and building products.
Foam Fabricators dates to 1957 when the company began making EPS ice chests and swim toys. The company has been under the same private ownership for more than 20 years, according to its website.
Aside from its Arizona headquarters, company locations are in Compton and Modesto, Calif; Jefferson, Ga.; Fort Madison, Iowa; New Albany, Ind.; El Dorado Springs, Mo.; Bloomsburg and Erie, Pa.; Anderson, S.C.; Jackson, Tenn.; Keller, Texas; and Querétaro and Tijuana, Mexico.