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United States securities and exchange commission logo
August 5, 2022
Ryan J. Faulkingham
Chief Financial Officer
Compass Diversified Holdings
301 Riverside Avenue, Second Floor
Westport, CT 06880
Re: Compass Diversified
Holdings
Form 10-K for the
Fiscal Year Ended December 31, 2021
Filed February 24,
2022
File No. 001-34927
Compass Group
Diversified Holdings LLC
Form 10-K for the
Fiscal Year Ended December 31, 2021
Filed February 24,
2022
File No. 001-34926
Supplemental
response letter dated July 14, 2022
Dear Mr. Faulkingham:
We have reviewed your July 14, 2022 response to our comment
letter and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
June 30, 2022 letter.
Form 10-K for the Fiscal Year Ended December 31, 2021
Financial Statements
Note C - Acquisition of Businesses, page F-18
1. We have reviewed your
response to comment 2 and have the following comments:
Clarify in
further detail how the intercompany loans represent purchase price
consideration under
ASC 805-30-30-7. In doing so, provide us with a walkthrough of
Ryan J. Faulkingham
Compass Diversified Holdings
August 5, 2022
Page 2
the loan life cycle and pertinent details of all related
transactions, including the
specific parties that give and receive the loans and the typical
timing of loan
issuance and repayment. Clarify if the intercompany loans
received by the newly
created holding company ("Holding Company") are paid to the
selling shareholders
or are retained in the acquired business. Consider providing an
illustrative example
to facilitate our understanding.
Revise your disclosures in future filings to clearly explain
the Holding Company
structure you use to conduct less than wholly-owned business
combinations. In
addition to any clarifying disclosures stemming from the
preceding bullet, ensure that
you disclose that the acquisition line item within investing
activities on your
statements of cash flows includes amounts received from and paid
on behalf of non-
controlling interest holders. Also tell us and consider
disclosing if the selling
shareholders that continue as non-controlling interest holders
exit the predecessor
entity and buy into the new Holding Company at the same price or
a different price.
You may contact Beverly Singleton at (202) 551-3328 or Andrew Blume at
(202) 551-
3254 with any questions.
FirstName LastNameRyan J. Faulkingham Sincerely,
Comapany NameCompass Diversified Holdings
Division of
Corporation Finance
August 5, 2022 Page 2 Office of
Manufacturing
FirstName LastName