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Merrill Lynch Takes Over Part of Suspension Specialist Fox

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SCOTTS VALLEY, USA – One of the world’s biggest investment companies BofA Merrill Lynch (the investment division of Bank of America) has acquired a stake of close to 10% in the listed suspension expert Fox Factory Holding Corp. BofA Merrill Lynch acquired some 4 million shares of the company’s common stock through a secondary public offering (SPO) by Fox’s former parent company Compass Diversified Holdings LLC (Codi) and other shareholders.

Merrill Lynch Takes Over Part of Suspension Specialist Fox
Since Fox Factory went public in 2013 the suspension products maker has been steadily expanding. - Photo Fox

Codi was still holding a 33% stake in Fox. With the sale of 3.5 million shares owned by Codi out of the 4 million shares bought by Bofa Merril Lynch the former Fox parent company reduced its involvement in the suspension expert from about 33 to about 23%. BofA Merrill Lynch paid US$ 18.00 (€ 16.12) per share.

Reducing stake

Codi is steadily reducing its stake in its former subsidiary Fox Factory. Up to July 2014 the US industry holding still kept a 53% majority stake in Fox. That dropped to 41% about two years ago. In March 2016 Fox Factory itself acquired 500,000 shares for US$ 15.895 per share from Codi. After the closing of the SPO this August Codi cashed for a third time and remains now with a 23% shareholding in Fox.

Steadily expanding

Since Fox Factory went public in 2013 the suspension products maker for snowmobiles, mountainbikes, motorcycles, ATVs, UTVs, off-road cars, trucks, and SUVs has been steadily expanding. By the end of 2014 Fox acquired Race Face Performance Products operating, next to Race Face, also Easton Cycling. One year later the suspension specialist acquired the MTB division of competitor Marzocchi.

Making big money

Codi has been making big money with Fox Factory. The industry holding owned by private equity firm The Compass Group is focusing on investments “in leading niche industrial or branded consumer companies headquartered in North America.” They turn these companies around for selling them at the right time.

Next to Fox The Compass Group also owned another medium-sized bicycle company. June 2015 Codi sold Camelbak Product LLC to Vista Outdoor Inc. This August Codi acquired a majority stake in the California-based outdoor company 5.11 Tactical (5.11. Inc.).

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