CEO SAYS BUY IS PART OF STRATEGY TO BUILD SWIM SPA BUSINESS
ON JUNE 29, Chino Hills, California-based Jacuzzi Brands LLC announced it had purchased Mississauga, Ontario-based Hydropool Hot Tubs and Swim Spas. Bob Rowan, CEO of Jacuzzi, says his company was specifically looking to grow its swim spa business.
“[Swim spas] are something we’ve been watching for a number of years,” Rowan says. “A very tiny part of our business is swim spas, but we really had no expertise in the category to speak of. We honestly didn’t take it too seriously until a few years ago and now we realize it is viable and growing. We see it as a category with a ton of opportunity.”
Rowan says Jacuzzi looked at investing the resources to grow its swim spa business organically. “But for obvious reasons, partnering with a leader in the industry makes much more sense. Hydropool was clearly a leader in the industry, we reached out to them and immediately hit it off. We had the same vision for the hot tub industry, as well as the excitement over what a combination between Hydropool and Jacuzzi could do.”
President of Hydropool, David Jackson, will continue on in that role. He’s been with the company for 22 years.
“If David Jackson didn’t want to stay and wasn’t excited about what we could do together, honestly the acquisition would not have been as appealing,” Rowan says.
Both Hydropool and Jacuzzi dealers laud the deal.
“I think it is a great move,” says Steven Ruscigno, general manager of Oregon Hot Tub, which carries both brands. “Hydropool is an outstanding company with an unbelievable company culture. It is my understanding as well that all the Hydropool players will stay in place. I have a great deal of respect for both companies and feel this will allow Hydropool to accelerate their growth much faster than before with the resources Jacuzzi brings to the table. I truly see it as a win-win.”
Rowan says Hydropool and its management team will stay intact. “What that means in the future, we’ve got to figure that out,” he says. “But they have great product development, great marketing, [they are] a great manufacturer with a fantastic heritage in training, in dealer development, in teaching dealers how to run successful businesses and how to sell these products. So we’re leaving them alone.” This is the fourth time Jacuzzi has bought another hot tub manufacturer. In 1998 it purchased Sundance Spas from Clark Manufacturing; in 2012 it bought the assets of ThermoSpas; and in 2013 it acquired Dimension One Spas.
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“I am grateful to be part of several teams that are so very committed to the hot water industry,” says Norm Coburn, owner of New England Spas, which carries the Jacuzzi brand among others. “Fewer and stronger players will only result in raising the quality bar and ultimately increase user satisfaction and referrals.”
Hydropool was founded by Dale Papke in 1970 as a commercial swimming pool builder and began selling hot tubs in 1978. Eventually it started manufacturing its own hot tubs.
“Having been involved with Hydropool for several years, I have always been impressed with their products and innovations,” says Chris Ogden, general manager at Time Machine Hot Tubs in Longview, Texas, specifically mentioning Hydropool’s self-cleaning feature. “They are very popular spas in Canada, the northern United States and in Europe but are relatively unknown in our area. Their marketing initiatives have been steadily increasing, but my belief is they will grow exponentially with the resources Jacuzzi will provide.”
Jacuzzi has also been bought and sold several times, going from being a privately held company to publically traded in 2005. In 2006, private equity firm Apollo Global Management acquired it.
“These transactions, along with continued support from our equity sponsors Ares Management, Clearlake Capital Group and Apollo Global Management, provide us an excellent platform for continued momentum in the global marketplace,” Rowan says. “Further, none of this would be possible without the continued support of our employees, customers and suppliers, who continue to believe in the strength of our brands and our tremendous growth potential.”
“It is a competitive industry and the movers and shakers are always looking for gems like Hydropool that have a great, unique product,” Ogden says. “It makes more sense to partner with companies that already have the personnel and expertise in place rather than developing innovations in-house. It’s just smart business.”
“Sometimes you buy broken companies that you fix, and other times you get companies that are truly great,” Rowan says. “You put them together and you end up with proverbial 1+1=3. That’s what this is. Hydropool is going to teach Jacuzzi things, we’re going to teach Hydropool things. We’re going to run these companies separate, but we’re going to share best practices and we will make each other better. That’s what’s exciting.”