Compass Diversified Holdings's Comment on Competitors and Industry Peers
The emerging hemp foods category has a limited number of participants that
offer a minimal number of hemp based products while focusing on a broader assortment
of food items. Competition is limited due to restricted raw hemp seed access
in the United States. Manitoba Harvest’s strong supplier relationships,
regulated access to hemp seeds and deep knowledge of the growing and harvesting
of hemp afford the company with a unique competitive advantage.
Manitoba Harvest has the highest level of global certification in food safety
and quality and is the first and only hemp-based food company to achieve British
Retail Consortium (“BRC”) Global Food Safety Initiative certification.
There are currently an estimated 238 active domestic PCB manufacturers. Advanced
Circuits’ competitors differ amongst its products and services.
Competitors in the small-run and quick-turn PCBs production industry include
larger companies as well as small domestic manufacturers. The two largest independent
domestic small-run and quick-turn PCB manufacturers in North America are TTM
Technologies, Inc. and Viasystems Group, Inc. Though each of these companies
produces small-run PCBs to varying degrees, in many ways they are not direct
competitors with Advanced Circuits. In recent years, each of these firms has
primarily focused on producing boards with greater complexity in response to
the off shoring of low and medium layer count technology to Asia. Compared to
Advanced Circuits, small-run and quick-turn PCB production accounts for much
smaller portions of each of these firm’s revenues. Further, these competitors
often have much greater customer concentrations and a greater portion of sales
through large electronics manufacturing services intermediaries. Beyond large,
public companies, Advanced Circuits’ competitors include numerous small,
local and regional manufacturers, often with revenues under $20 million that
have long-term customer relationships and typically produce both small-run and
quick-turn PCBs and production PCBs for small OEMs and EMS companies. The competitive
factors in small-run and quick-turn production PCBs are response time, quality,
error-free production and customer service. Competitors in the long lead-time
production PCBs generally include large companies, including Asian manufacturers,
where price is the key competitive factor.
New market entrants into small-run and quick-turn production PCBs confront substantial
barriers including significant investments in equipment, highly skilled workforce
with extensive engineering knowledge and compliance with environmental regulations.
Beyond these tangible barriers, Advanced Circuits’ management believes
that its network of customers, established over the last two decades, would
be very difficult for a competitor to replicate.
Management believes the following companies represent Arnold’s top competitors:
Thomas & Skinner
Magnum Magnetics
Electron Energy
Vacuumschmelze Gruner, Germany-based
Competitive Landscape
The environmental services market is highly fragmented with numerous participants.
However, a majority of these companies specialize in a narrower scope of services
or treatment capabilities. Industry competitors relevant to Clean Earth’s
served markets range from large public companies to small, single-service participants.
Competition primarily includes processors of contaminated soils, dredging companies
(to a limited extent), waste treatment providers and waste management companies.
In Clean Earth’s core markets, competition tends to be primarily comprised
of regional services providers or single-service companies with limited scale.
Given these dynamics, we believe the industry will likely favor players such
as Clean Earth that have large scale and management teams with many years of
experience and extensive familiarity with the regulatory landscape.
Barriers to Entry
Permits - Clean Earth maintains an extensive portfolio of regulatory permits,
including 107 active permits and 140 permit modifications. Each facility maintains
various local, state, and federal authorizations for the acceptance, treatment,
and beneficial reuse of a wide variety of hazardous and nonhazardous materials,
as well as all necessary air and water discharge permits required for operation.
These permits are extremely difficult to obtain due to the complex navigation
of multiple layers of regulation, lengthy and costly public review periods and
typical public NIMBY opposition. Clean Earth maintains a large team of environmental,
health and safety experts that have developed trusted relationships and credibility
with local, state and federal regulatory agencies over the last 25 years.
Extensive Network - The Company’s extensive network of 14 permitted facilities
is strategically located near major waste generation centers with an abundance
of regulations governing waste treatment and disposal. Given transportation
costs, the proximity of Clean Earth’s facilities to key markets and convenient
access to rail, barge, and trucking transportation are significant competitive
advantages that drive profitability. Furthermore, its maintenance of multiple
backend beneficial reuse sites provides flexibility to direct volume to the
most appropriate facilities based on available processing and placement capacity.
Leading Brand Recognition & Market Share - Sterno Products is the market
share leader in the canned chafing fuel market. Sterno Products enjoys outstanding
brand awareness and a reputation for superior quality and performance with distributors,
caterers, hotels and other end users.
Low Cost versus Alternatives - Sterno Products’ customers are typically
caterers, hotels or restaurants who utilize canned chafing fuel to maintain
prepared food at a safe and enjoyable serving temperature. The risk of ruining
a dining experience and the low proportionate cost of canned chafing fuel relative
to the cost of a catered event represent significant barriers to customers switching
out of Sterno Products’ canned chafing fuel products. Additionally, management
believes that there is no other technology available today that offers the portability,
reliability and low cost of the Sterno Products canned chafing fuel products.
Competition in the medical support surfaces and patient positioner market is
based predominantly on product performance, features, warranties, service, price
and durability. Other factors may include the ability of a manufacturer to customize
their product offerings to meet the needs of large distributors. Tridien competes
with manufacturers of varying sizes who then sell predominantly through distributors
to the acute care, long term care and home health care markets. Tridien differentiates
itself from these competitors based on its breadth of product offerings, patented
technologies, quality of the products it manufacturers as well as its design
and engineering capabilities to produce a full spectrum of surfaces that provide
the greatest therapeutic outcome for every price point. While many competitors
specialize in the production of a single type of support surface, and often
outsource certain manufacturing skills required to develop and manufacture products,
Tridien is able to offer its customers a full spectrum of support surfaces.