8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 5, 2023

Compass Minerals International, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-31921	36-3972986
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer <br>Identification No.)

9900 West 109th Street

Suite 100

Overland Park, KS 66210

(Address of principal executive offices)

(913) 344-9200

(Registrant's telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, $0.01 par value	CMP	The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Item 1.01    Entry into a Material Definitive Agreement.

On May 5, 2023, Compass Minerals International, Inc. (the “Company”) entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Fortress North America, LLC (“FNA”), FRS Group LLC (“FRS”, and together with FNA, “Fortress”) and those persons set forth on Exhibit A and Exhibit B attached thereto (collectively, the “Sellers”), pursuant to which the Company purchased the remaining membership interests of FNA and FRS not previously owned by the Company, which represented approximately 55% of the ownership of Fortress (the “Transaction”). As previously disclosed, the Company has been an approximately 45% minority owner of Fortress, a next-generation fire retardant company, since its most recent investment in January, 2022.

The Transaction signed and closed on May 5, 2023. As a result of the Transaction, the Company became the sole member of FNA and FRS, and FNA and FRS became wholly-owned indirect subsidiaries of the Company.

As consideration for the Transaction and in exchange for the purchased membership interests, the Company has (1) paid approximately $26 million in cash to the Sellers (the “Closing Payment”), (2) agreed to make certain payments of up to $28 million in aggregate, which may be made in cash or in the Company’s common stock, par value $0.01 per share (the “Common Stock”) at the election of the Company, to the Sellers upon achievement of certain milestones as set forth in the Purchase Agreement (the “Milestone Payments”) and (3) agreed to pay to the Sellers certain annual cash earn-out payments in an amount equal to $0.30 per gallon of Fortress fire retardant sold for a period of 10 years after the closing, contingent upon Fortress achieving certain EBITDA performance thresholds, as provided in the Purchase Agreement (the “Earn-Out Payments”). Additionally, the Company and Fortress have established a bonus pool to be allocated to certain employees and contractors of Fortress.

The Purchase Agreement contains certain representations, warranties and covenants which the Company believes are customary for transactions of this type. The disclosure regarding the Purchase Agreement has been included herewith to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the Company or any of its subsidiaries or affiliates, including Fortress. The representations, warranties and covenants contained in the Purchase Agreement were made by the parties thereto only for purposes of the Purchase Agreement and as of specific dates as set forth therein; were made solely for the benefit of the parties to the Purchase Agreement; may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Purchase Agreement; may have been made for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors and security holders. Accordingly, such representations, warranties and covenants or any descriptions thereof should not be relied on by any persons as characterizations of the actual state of facts and circumstances of the Company or any of its subsidiaries or affiliates at the time they were made and the information in the Purchase Agreement should be considered in conjunction with the entirety of the factual disclosure about the Company in the Company’s public reports filed with the Securities and Exchange Commission (the “Commission”). Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q covering the date of the Purchase Agreement.

Item 2.03    Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 of this Current Report on Form 8-K relating to the Transaction is incorporated by reference herein.

Item 7.01    Regulation FD Disclosure.

On May 9, 2023, the Company issued a press release announcing the signing of the Membership Interest Purchase Agreement and the consummation of the Transaction. A copy of this press release is being furnished as Exhibit 99.1 and incorporated by reference herein.

The information contained in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

FORWARD-LOOKING STATEMENTS

This Current Report may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. Forward-looking statements may generally be identified by the use of words such as “may”, “will”, “anticipate”, “expect”, “intend”, “seek”, “estimate”, “would”, “should”, “plan”, “potential”, “future”, “target”, “project” or variations of these words or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters, although not all forward-looking statements contain such identifying words. Forward-looking statements may include, without limitation, statements about the Company’s or Fortress’ future performance or financial condition, the Transaction, the Sellers or their respective affiliates, the anticipated potential benefits of the Transaction and the consideration payable pursuant to the Transaction (including potential future Milestone Payments and Earn-Out Payments). These statements are based on the Company’s current expectations, estimates and projections and involve risks and uncertainties that could cause the Company’s or Fortress’ actual results to differ materially. The differences could be caused by a number of factors including, without limitation, those factors identified in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual and Quarterly Reports on Forms 10-K and 10-Q, as well as the Company’s other Commission filings. Opinions expressed are current opinions as of the date hereof. Investors are cautioned not to place undue reliance on such forward-looking statements and should rely on their own assessment of an investment. The Company undertakes no obligation to update any forward-looking statements made in this Current Report to reflect future events or developments, except as required by law.

Item 9.01    Financial Statements and Exhibits.

(d)     Exhibits.

Exhibit No.	Exhibit Description
99.1	Press Release, dated May 9, 2023.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	COMPASS MINERALS INTERNATIONAL, INC.
Date: May 9, 2023	By:	/s/ Lorin Crenshaw
		Name: Lorin Crenshaw
		Title: Chief Financial Officer

Document

Exhibit 99.1

FOR IMMEDIATE RELEASE

Compass Minerals Announces Acquisition of Outstanding 55% Interest in Fortress North America

Transaction Builds Upon Prior Minority Ownership Stake and Advances Strategy to Accelerate Growth by Expanding into Adjacent Markets

OVERLAND PARK, Kan. (May 9, 2023) – Compass Minerals (NYSE: CMP), a leading global provider of essential minerals, today announced that it has acquired the outstanding 55% interest in Fortress North America (Fortress), a next-generation fire retardant company, bringing the company’s ownership stake to 100%. Building upon a previous 45% minority ownership stake that Compass Minerals has held in Fortress since January 2022, the transaction provides Compass Minerals full ownership of all Fortress assets, contracts and intellectual property.

“The value creation possible through the full integration of Fortress’ patented portfolio of next-gen fire retardant formulations with our extensive logistics and production capabilities made this acquisition a priority for our company,” said Kevin S. Crutchfield, president and CEO. “With the recent milestones attained by Fortress, our confidence in its earnings potential is bolstered as we gain a share of the next-gen fire retardant market, a counter-seasonal opportunity and sizeable addressable market that is now open to us. We are pleased to welcome the Fortress team into the Compass Minerals family.”

The leadership team at Fortress, including CEO Robert Burnham, will continue to lead and develop the business.

Founded in 2016, Fortress is a developer of proprietary formulations of magnesium chloride-based aerial and ground fire retardants proven to be more effective and safer on the environment than traditional fire retardants on the market. Magnesium chloride is already an existing product stream out of Compass Minerals’ Ogden, Utah, solar evaporation facility.

In December 2022, Fortress became the first new company in over two decades to have long-term aerial fire retardants added to the U.S. Forest Service’s (USFS) Qualified Product List (QPL). Fortress’ FR-100 Powder and FR-200 Liquid Concentrate products met and exceeded the USFS’ rigorous testing criteria in such categories as environmental effects and toxicity to aquatic and mammalian species, corrosion on a variety of aircraft metals, burn retardation efficacy and other qualifiers (e.g., long-term storability, acceptable viscosity and pumpability) and finally the completion of a live wildfire operational field evaluation. In May of 2023, Fortress entered into a contract with the USFS whereby Fortress will provide up to five mobile-deployed fire retardant air tanker bases, utilizing Fortress’ newly designed, state-of-the-art mixing units. These units are expected to be deployed to air bases where Fortress will supply product and attendant services for the 2023 fire season. Under the framework used by U.S. government agencies, including the USFS, to boost competition in critical sectors, a substantial portion of Fortress’ activity will be contracted by the USFS in fiscal 2023 specifically to enable and encourage Fortress to build additional scale. Fortress expects to continue to leverage Compass Minerals’ infrastructure, logistics, distribution network and operating expertise in an effort to further increase its market growth and competitiveness in 2024 and beyond.

Burnham commented, “Being fully integrated with Compass Minerals will represent a quantum leap forward for Fortress and empower us to scale up and compete in what has been a one-sided market. Achieving the recent milestone of becoming the first new company in more than two decades to have our aerial fire retardants fully approved on the Qualified Product List, followed by securing a binding

supply agreement with the USFS, represents the culmination of a multi-year effort and shared vision between the Fortress and Compass Minerals teams. Now, with a robust portfolio of next-generation formulations in the pipeline and buttressed by the infrastructure available to us as part of Compass Minerals, we are shifting our focus to the rapid acceleration of our supply chain, logistics and manufacturing capabilities. The combination of Fortress and Compass Minerals is the next natural step toward our joint mission to establish Fortress as the market leader in next-gen fire retardants.”

Additional information regarding the transaction can be found on the investor relations section of the Compass Minerals website at compassminerals.com.

About Compass Minerals

Compass Minerals (NYSE: CMP) is a leading global provider of essential minerals focused on safely delivering where and when it matters to help solve nature’s challenges for customers and communities. The company’s salt products help keep roadways safe during winter weather and are used in numerous other consumer, industrial, chemical and agricultural applications. Its plant nutrition products help improve the quality and yield of crops, while supporting sustainable agriculture. Additionally, the company is pursuing development of a sustainable lithium brine resource to support the North American battery market and is owner of Fortress North America, a next-generation fire retardant company. Compass Minerals operates 12 production and packaging facilities with nearly 2,000 employees throughout the U.S., Canada and the U.K. Visit compassminerals.com for more information about the company and its products.

About Fortress North America

With corporate locations in California and Montana, Fortress, founded in 2016, is a new and innovative fire-retardant company that has designed and developed the Fortress family of chemically advanced next-generation long-term fire retardants, engineered for environmental safety and superior efficacy. Visit www.fortressfrs.com for more information about the company and its products.

Forward Looking Statements

This press release may contain forward-looking statements. Forward-looking statements may generally be identified by the use of words such as “may”, “will”, “anticipate”, “expect”, “intend”, “seek”, “estimate”, “would”, “should”, “plan”, “potential”, “future”, “target”, “project” or variations of these words or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters, although not all forward-looking statements contain such identifying words. Forward-looking statements may include, without limitation, statements about Compass Minerals’ or Fortress’ future performance or financial condition, the transaction, the sellers or their respective affiliates and the anticipated potential benefits of the transaction. These statements are based on Compass Minerals’ current expectations, estimates and projections and involve risks and uncertainties that could cause Compass Minerals’ or Fortress’ actual results to differ materially. The differences could be caused by a number of factors including those factors identified in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the company’s Annual and Quarterly Reports on Forms 10-K and 10-Q, including any amendments, as well as the company’s other SEC filings. Opinions expressed are current opinions as of the date hereof. Investors are cautioned not to place undue reliance on such forward-looking statements and should rely on their own assessment of an investment. The company undertakes no obligation to update any forward-looking statements made in this press release to reflect future events or developments, except as required by law.

Investor Contact	Media Contact
Brent Collins	Rick Axthelm
Vice President, Investor Relations	Chief Public Affairs and Sustainability Officer
+1.913.344.9111	+1.913.344.9198
InvestorRelations@compassminerals.com	MediaRelations@compassminerals.com