CompoSecure Completes Merger with Husky Valued at $7.4 Billion
CompoSecure completed its previously announced business combination with Husky Technologies. The combination of Husky and CompoSecure creates a best-in-class, diversified compounder featuring two global market leaders with ~70% recurring revenues, high margins, and strong free cash flow generation. As previously disclosed, the combined business is valued at $7.4 billion, representing ~11.6x 2026E Pro Forma Adjusted EBITDA of ~$635 million and a ~7.5% free cash flow yield in the first full year post closing. Additionally, the transaction is expected to be more than 20% accretive to adjusted diluted earnings per share in the first full year post closing. The business combination was funded through an oversubscribed private placement of approximately $2.0 billion from premier investors, Platinum Equity's rollover of approximately $1.0 billion, and approximately $2.0 billion of debt. The David Cote Family will retain its entire $1.0 billion equity investment in the corporate entity. In conjunction with closing the Husky transaction, CompoSecure is also announcing a rebrand to GPGI, Inc. ("GPGI"). The new name represents our core philosophy of acquiring and operating businesses that hold "Great Positions in Good Industries" - or "GPGI." This rebranding follows the evolution of CompoSecure from a single operating business into a permanent capital platform purpose-built to acquire, own, and scale great businesses that can benefit from the systematic deployment of the Resolute Operating System. On a go-forward basis, both CompoSecure and Husky will retain their existing trade names and will be two distinct reporting segments operating independently as part of GPGI's permanent capital platform. It is anticipated that the Company's common stock will begin trading under the new name and ticker symbol "GPGI" on the New York Stock Exchange at the opening of trading on January 23, 2026.
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CMPO Options Analysis: $20 Put Contract Attractiveness
- Put Contract Appeal: The current bid for the $20.00 put contract is 25 cents, meaning if an investor sells it, they commit to buying CMPO shares at $20.00, effectively lowering their cost basis to $19.75, which is a 21% discount from the current price of $25.20, making it attractive for potential buyers.
- Yield Potential Analysis: Should the put contract expire worthless, it would yield a 1.25% return on cash commitment, or 1.85% annualized, referred to as YieldBoost, highlighting the potential profitability of this option.
- Call Contract Returns: The $30.00 call contract has a current bid of 10 cents; if an investor buys CMPO shares at $25.20 and sells this call, they could achieve a total return of 19.44% if the stock is called away at expiration, indicating significant upside potential.
- Risk Assessment: Current analytics suggest a 69% chance that the $20.00 put contract will expire worthless, while the $30.00 call has a 63% chance of doing the same, emphasizing the need for investors to monitor these probabilities to assess investment risks and rewards.
CompoSecure Stockholders Approve Merger with Husky Technologies
- Shareholder Approval: CompoSecure's shareholders approved the merger with Husky Technologies during a special meeting, which is expected to close in January 2026, potentially opening new growth avenues for the company.
- Regulatory Approvals Pending: The completion of the merger is subject to customary closing conditions, including regulatory approvals, which may affect the timeline and final outcome of the transaction.
- Risk Factors Highlighted: The company noted various risks associated with the merger, including the possibility of not completing the transaction on time or obtaining necessary approvals, which could impact business relationships and financial conditions.
- Forward-Looking Statements: The announcement includes forward-looking statements that emphasize uncertainties regarding the timing of the transaction's completion and expected benefits, reminding investors to consider potential legal and market risks.
