Industry acquisitions are keeping us all on our toes
I was about halfway done writing this column when I got the news that Jacuzzi had purchased Hydropool. That changes things a bit, doesn’t it?
I had been planning to write about living in community — your business, your customers and your employees — working to help one another. There’s an interesting synergy and responsibility that you take on by doing business in a place, and we have a story about that on page 37.
If I’m being honest, this is probably my third or fourth time rewriting this because I keep changing my mind about the impact that the Jacuzzi/Hydropool, and other recent acquisitions, have on our industry.
During the worst years of the recession there were predictions of major consolidations. While this happened, it never reached the level many forecasted. But here we are a few years out and there has been a steady stream of purchases across all segments of the industry.
In addition to purchasing Sundance Spas years earlier, Jacuzzi has purchased Thermospas, Dimension One Spas and now Hydropool Hot Tubs. In addition to its earlier purchase of Caldera Spas, Watkins Wellness has purchased American Hydrotherapy Systems (Freeflow Spas and Fantasy Spas) and Endless Pools. MAAX Spas bought L.A. Spas and made it clear they had an acquisition strategy going forward. LPI, Inc., the makers of Signature Spas, bought Catalina Spas. On the chemical side, NC Brands has made several purchases including Seaklear. Instead of coming in a rush during down years, these acquisitions are happening when things are on the upswing. In many instances the acquired companies weren’t in financial distress, but were made an offer they couldn’t refuse.
If we’re being candid, and why not, my first reaction to news of this latest purchase was, “OMG are there going to be any manufacturers left to advertise in the magazine?” A valid fear, but this is what I was vocalizing: Is all of this consolidation good for our industry, us included?
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This is my ninth year working in the hot tub industry, so my feet are thoroughly wet, but I’m not working with the historical context of our readers with 30 or more years in. Fortunately, I’ve made some friends, old timers you might call them, who pointed out that this isn’t the only time this industry has seen lots of consolidation. And when it happened before it was during times of economic and industry growth.
The resources these larger brands bring to product development and marketing can float all boats, so to speak. And the small and midsized brands can definitely still compete. It may require a rededication to their niche and a close look at their efficiencies, but that also can benefit all. They aren’t a manufacturer, but Gib-San Pools and Landscape Creations is a great example of what a business with laser-like focus can accomplish, page 32.
These are interesting and exciting times indeed. I’ve talked to dealers who had record-breaking first quarters and, after taking a deep breath, I’m anticipating more good news to come.