LESLIE'S POOL STORES PLACED UP FOR SALE
By Ben Thomas of Pool & Spa News
Via Poolandspa.com Online Newsletter
Las Vegas, NV USA
The nation’s largest pool and spa retailer is for
sale. Private equity firm Leonard Green & Partners reportedly is
asking for more than $1 billion for Leslie’s Poolmart, which
operates 640 stores in 35 states. Interested buyers include Bain
Capital, Madison Dearborn Partners and TPG. Goldman Sachs will
manage the sales process.
In the past fiscal year, Leslie’s posted annual sales
of $510 million, generating about $110 million in net earnings.
Published reports also indicate that the company holds approximately
$250 million in debt. Firm-to-firm sales, known as “secondary
buyouts,” have long been popular in the financial industry, but are
rare in the pool and spa market, particularly among retailers.
Brian Quint, president of Aqua Quip in Seattle, said
that a change in private-equity ownership could mean more new
advisers will work with the leadership staff at Leslie’s, which
could bring fresh thinking to the pool industry.
“I think it’s good news that there’s outside capital
looking to invest in our industry,” Quint said. “It’s good to get
new sources of finance, new investment advisors, new strategies.”
A sale — depending on the price — could be seen as a
positive for the pool industry. “It may imply that we’ve hit rock
bottom, and now we’re bouncing off,” Quint said. “If someone’s
coming in and buying in this environment, they may feel there’s an
upside. What a great time to come in and buy if, indeed, value has
The story of Leslie’s began in 1963, when Philip
Leslie and his partner, Raymond Cesmat, launched a chain of pool
supply stores throughout the Los Angeles area. In 1988, Leslie’s was
sold to the Los Angeles-based venture capital firm Hancock Park
Associates. In 1991, the investment bank Montgomery Securities
issued 47 percent of the company’s stock as an initial public
offering, and Hancock Park led Leslie’s through a period of sharp
growth throughout the ’90s. In 1997, Hancock Park partnered with
private-equity group Leonard Green & Partners to take the company
But while the move may signal some degree of optimism
among investors, many in the industry doubt the sale will have much
effect on the pool business as a whole.
“It’s not a significant thing; companies buy and sell
all the time,” said Charlie Schobel, the vice president and general
manager of BioLab Inc. in Lawrenceville, Ga. Still, the new owners
are likely to invest in the business to grow it, which might lead to
more consumers making aftermarket purchases, Schobel observed.
Others, however, feel that such a change is unlikely to be sparked
by a private-equity sale.
“I don’t know that [this sale] means much of anything
for the industry,” said Eric Mueller, president of the large
Midwestern retail chain Watson’s, which is based in Cincinnati.
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