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Major Merger

Monomoy Capital Partners acquires Artesian Spas, Marquis

Two hot tub giants have united.

On January 25, Monomoy Capital Partners, a middle-market private investment firm focused on operational value creation, announced its acquisition of both Artesian Spas and Marquis.

Marquis Corp., formerly an employee-owned company, was founded in 1980 in Independence, Oregon. The company makes hot tubs, swim spas and related accessories designed with cutting-edge features for comfort and long-lasting enjoyment.

The comparatively young Artesian Spas was founded in 1993 as a family-owned manufacturer of hot tubs and swim spas. With four lines of hot tubs and swim spas, the company manufactures out of its Las Vegas headquarters.

Both will operate under a parent holding company with their respective management teams working in partnership, though there is no intermingling of the sales and product development departments. The new spa company combination will offer dealers and customers a full line of hot tubs and swim spas under multiple well-known, respected brands.

“Artesian and Marquis have both experienced exceptional demand and growth over the past two years,” Monomoy managing director Lee Mlotek says in a recent press release. “The new holding company will leverage the strengths of each brand to deliver superior products made in the U.S.A. to the growing outdoor wellness market. We are excited to partner with the management teams as they scale their businesses together, and we look forward to bringing additional pool and spa brands to the platform in the future.”

Marquis decided to sell in the fourth quarter of 2020. In June, the company had narrowed broker searches to three firms, all of which were interviewed and asked about their future goals for the brand.

Monomoy ultimately won the acquisition because of its vision and record of successfully growing manufacturing businesses, says Jim Johnston, vice president of sales and marketing at Marquis.

“We wanted to build a stronger company that would go on and do more,” Johnston says. “We needed more horsepower out of somebody like Monomoy to come in and help make that happen.”

After connecting with Monomoy, Johnston says, the decision was a no-brainer.

“It was a real straightforward opportunity for our business,” he says. 

While he declined to disclose deal details, Johnston says it added “low to mid-six figures to retirement accounts” of longtime Marquis workers.

The deal closed December 20 after an employee vote, which resulted in “an overwhelming yes” to move forward, Johnston says.  While most of the decision was kept from dealers until that vote, 15 to 20 dealers got some insight during Marquis’ buyer research process, Johnston says.

Our dealers are going to feel a strength from the brand they understood and trusted before, but we’re going to earn even greater trust.

Jim Johnston, Marquis

For its part, Monomoy identified certain aspects of Marquis’ leadership that would make the spa company run even better. Johnston says an experienced private investment firm with over $2.7 billion in assets must be doing something right. “We’re going to benefit from getting more people with more skills involved,” Johnston says. “Our dealers are going to feel a strength from the brand they understood and trusted before, but we’re going to earn even greater trust.”

Additionally, Johnston says IT improvements, manufacturing enhancements and quality additions to the team are in the works. ”[Monomoy’s] goal is to use the acquisitions of Artesian and Marquis as cornerstone pieces of a puzzle,” he says.

Marquis CEO John Schrenk adds that Artesian has a stellar brand reputation and that its partnership with Monomoy will allow it “to continue to scale our two businesses.”

“We are pleased to be partnering with a company that shares our goal of producing high-quality products,” he says, “with industry-best customer service.”

“Integrity and quality — those are two things that Marquis and Artesian share,” says Jordon Silon, Artesian’s vice president of global sales.

Monomoy completed its acquisition of Artesian Spas in October 2021, so it has a head start on going through the Monomoy improvement process. Silon has already started to see positive changes.

“We are building more spas now than we were last year,” Silon says. “Even with the supply chain issues, we’ve been able to up our production. The systems that Monomoy put in place are very forward thinking.”

Even though it’s been less than a year, Silon says it seems like the private equity firm already has buy-in from Artesian employees as well.

“[Monomoy] believes in total transparency,” Silon says. “They keep everybody involved, set goals and then they share those goals with everybody from the person that’s sweeping the floors to the CEO.”

The acquisition also gives existing employees opportunities for professional growth that weren’t an option before.

“They share ideas with their other companies,” Silon says, giving the example of attending an IT bootcamp with IT professionals from Monomoy’s other businesses. “And people come back refreshed with new ideas, which helps every company [Monomoy] owns.”

The combined size of Marquis and Artesian gives each more buying power, helping with parts availability and pricing.

Silon, who has been with Artesian for 21 years, says it was time for this change.

“We needed to get to the next level,” he says. “The legacy is to carry on the quality product that we built and the name that we built. Delivering a great product and then having a team, not only in management, but in all employees having pride and integrity in what they do.”