Exclusive-Compass seeks to divest feminine care company The Honey Pot, sources say

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By Abigail Summerville

Dec 9 (Reuters) – The parent company of The Honey Pot has hired investment bank Raymond James to sell the feminine care company, according to two people familiar with the matter.

Compass Diversified bought The Honey Pot, which makes tampons, supplements and other health products, for $380 million last year. It has become one of Compass’ best-performing assets so the holding company expects to get a premium above that price, the people said.

The process is in its early days and a sale is not guaranteed, they cautioned, asking not to be identified because the matter is confidential.

Compass, The Honey Pot and Raymond James did not immediately respond to requests for comment.

Compass is a motivated seller right now because of issues at one of its other companies, Lugano, which filed for bankruptcy in November after a preliminary internal investigation revealed accounting fraud at the jewelry and diamonds company. Selling the Honey Pot could help alleviate some of Compass’ debt load.

The Honey Pot makes period care and health products such as tampons, washes, lubricants and supplements with plant-derived ingredients and clinically tested formulas. CEO and co-founder Beatrice Dixon launched the company in 2012 out of her apartment. 

The brand is a younger competitor to personal care giants like Procter & Gamble, which owns Tampax, and Kimberly-Clark, which owns Kotex.

Compass, which was founded in 1998 and went public in 2006, invests in a range of middle-market businesses. Its shares were trading at nearly $6 per share on Tuesday for a $440 million market capitalization. 

(Reporting by Abigail Summerville in New York. Editing by Dawn Kopecki and Nia Williams)