5.11 Tactical Acquired by Holding Company

Less than two weeks after Taylor Brands was acquired by Smith & Wesson, 5.11 Tactical has agreed to sell 97.5% equity to Compass Diversified Holdings (CODI) for $400 million, with the balance of the company to be acquired by 5.11 Tactical’s management team.

5.11 Tactical is a manufacturer of outdoor wear, tactical gear, and tools aimed primarily at law enforcement and military personnel. Their many products include tactical pants, popular with knife users because they feature dedicated knife pockets. 5.11 also produces knives under their own brand. Most of these blades retail in the $40-80 range. The company has worked with several prominent knife designers in the past, including Mick Strider and Mike Vellekamp. 5.11 Tactical also operates nine branded retail locations.

CODI CEO Alan Offenberg said that “5.11 represents a strong addition to our family of leading middle market businesses, and we welcome the opportunity to serve law enforcement, first responders, military personnel as well as the tactical consumer market.”

CODI is a holding company that specializes in the acquisition of companies with annual revenue between $50 million and $1 billion in a wide variety of industries. 5.11 reported a running rate annual revenue of $293 million and after tax earnings of $38 million. According to CODI, the acquisition of 5.11 includes a substantial tax asset.

In the last 2 years, CODI sold two of its subsidiaries and its majority interests in a third. But, they say they have “no specific preconceptions or requirements with regard to ownership period. We have found that imposition of such artificial time constraints frustrates management and leads to suboptimal performance for our companies.”

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Both Tom Davin, 5.11 CEO, and Francisco Morales, 5.11 President, are remaining in their current roles in the company. “At 5.11 our mission is to create purpose-built, functionally innovative tactical apparel and gear for the most demanding situations,” Davin said. “CODI’s acquisition of 5.11 provides an excellent platform to further that mission.”

The deal is expected to close within 45 days.

Knife featured in image: 5.11 Tactical XPRT Folding Knife

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