Compass Diversified Sells Sterno's Food Service Business for $292.5 Million

The deal will allow Compass to accelerate deleveraging and focus on Sterno's home fragrance business.

Mar. 30, 2026 at 10:51am

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Compass Diversified (NYSE: CODI) announced a definitive agreement to sell the food service business of its majority-owned subsidiary, SternoCandleLamp Holdings, Inc. (Sterno), to Archer Foodservice Partners for an enterprise value of $292.5 million. The transaction will allow Compass to repay outstanding debt and reduce its senior secured net leverage ratio below 1.0x. Following the sale, Compass will retain Sterno's home fragrance business, which will continue to operate under the Rimports name.

Why it matters

This sale is a strategic move by Compass to reduce leverage and address the gap between the company's market price and its intrinsic value. Sterno's food service business has been a valuable part of Compass's portfolio for over a decade, and the sale reflects the quality of the business that the team has built.

The details

Under the terms of the agreement, Archer Foodservice Partners, a leading provider of foodservice consumables, will acquire Sterno's food service business. In 2025, the business to be sold generated subsidiary adjusted EBITDA of approximately $30.3 million. Compass will use the net proceeds from the transaction to repay outstanding debt, which is expected to reduce the company's senior secured net leverage ratio below 1.0x.

  • The transaction is expected to close in May 2026.
  • Following the anticipated repayment of senior secured indebtedness, Compass expects to avoid fees associated with excess leverage under its senior secured indebtedness beyond June 30, 2026.

The players

Compass Diversified

An owner of leading middle-market businesses that leverages its permanent capital base and long-term disciplined approach to maximize cash flow generation and value creation.

Sterno

A majority-owned subsidiary of Compass Diversified that includes a food service business and a home fragrance business under the Rimports name.

Archer Foodservice Partners

A leading provider of foodservice consumables and parent entity of companies Handgards, Inno-Pak, and Fineline Settings, and a portfolio company of Wynnchurch Capital, L.P.

Elias Sabo

Chief Executive Officer of Compass Diversified.

Geoffrey J. Feil

Chief Executive Officer of Sterno.

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What they’re saying

“This transaction is a critical step in reducing leverage at CODI and reflects our commitment to taking decisive action — strategically selling businesses, rapidly deleveraging the balance sheet and addressing the gap between the market price and our intrinsic value.”

— Elias Sabo, Chief Executive Officer of Compass Diversified

“It has been a great privilege to lead the Sterno business. With a brand whose roots date back over 125 years, Sterno has a rich history as the most reliable source of portable heat and the clear choice for chefs, caterers, home entertainers, campers, and even those serving our country overseas during World Wars I and II. The business is stronger than ever and well-positioned for continued success.”

— Geoffrey J. Feil, Chief Executive Officer of Sterno

What’s next

The transaction is subject to customary closing conditions, including applicable regulatory approvals, and is expected to close in May 2026.

The takeaway

This sale represents a strategic move by Compass Diversified to reduce leverage and focus on the growth of Sterno's home fragrance business, demonstrating the company's commitment to maximizing value for its shareholders.