A new pool corporation will be listed on the stock exchange very soon and it’s a name we all know well. Latham – The Pool Company™, filed a notice with the Securities and Exchange Commission announcing its intention to sell its common stock in an initial public offering.
Under the ticker symbol SWIM, the Latham Group has applied to list its stock on the Nasdaq Global Select Market. Complete details about the offering and it’s terms are not yet known at this time.
The news of Latham’s intention to go public comes a month after Hayward, one of the “Big 3” manufacturers, made a similar announcement.
Latham, The Pool Company™, as it is now known was formerly known as Latham Pool Products.
Latham’s private equity partners, Pamplona Capital Management and Wynnchurch Capital, will hold more than 50% of the voting power of the company’s outstanding common stock, rendering the Latham Group a controlled company excluded from some corporate governance provisions.
Latham outlined a strategy to increase the overall market share of fiberglass among underground pools, change how customers access the company’s products, improve distribution capabilities across the United States, and expand internationally while discussing the company’s strengths and benefits.
Latham Pool Products – The Pool Company™ has made serious inroads with consumers with marketing directly to consumers as well as the acquisition of a 28% interest in Premier Pools & Spas.
Latham Moves Into Lead Generation
With a new emphasis on direct digital and social media marketing, backed by a demand aggregation platform, Latham has made serious inroads to market directly to consumers. Consequently, this has enabled them to feed more pool leads to their dealer base. According to Latham, the company delivered over 45,000 customer leads to its dealer base in 2020, the first year the plan was fully implemented. According to the group, this represents a 210% increase from 2019.
The company also referenced it’s size, claiming that its network of nine fiberglass pool factories and distribution centers allows it to supply fiberglass pools to 95 percent of the US population within just 48 hours.
Latham has increased its market share in the fiberglass pool industry over time by purchasing a number of existing manufacturers. Three recent transactions were mentioned in their IPO application. Latham believes this will help it position itself well in the future.
Recent Latham Acquisitions
The acquisition of Narellan, an Australian fiberglass pool manufacturer with operations in Canada and New Zealand, in 2019 bolstered the company’s foreign presence. According to Latham, foreign markets account for 19% of its revenue, with Canada, Australia, and New Zealand having the most representation. According to Latham, the company is still on the lookout for emerging markets.
At the very least, the Narellan acquisition is expected to help Latham extend its footprint in North America by increasing fiberglass penetration. Narellan, as Australia’s largest manufacturer of fiberglass pools, played a key role in the increased acceptance of fiberglass over the last two decades in Australia, where the segment now accounts for 70% of the pool industry, according to Latham.
“Leveraging insights gained from Narellan, we are investing to build the tools required to drive higher fiberglass penetration in the North American market,” Latham said.
It also mentioned that the acquisition of vinyl liner and safety cover manufacturer GLI in October 2020 has expanded its offerings in those categories.
In October, the company entered into a long-term strategic relationship with Premier Pools & Spas, acquiring a 28 percent equity stake in the pool-construction franchise. The company said, “The purpose of this investment in Premier Pools & Spas is to help expand our sales and distribution channels,”
In the future, it intends to form more strategic alliances with dealerships. “We believe these exclusive relationships will continue to enable us to increase market share at the expense of the fragmented and regional universe of competitors,” Latham said.
In North America, Australia, and New Zealand, Latham claims to be the largest builder, manufacturer, and marketer of in-ground residential swimming pools. It claims to have 32 locations, hiring over 2,000 people, and selling more than 8,700 fiberglass pools in the United States in 2020.
Although “net income does not adhere to this trend.” said Latham, 2020 represented the 11th consecutive year of net sales growth and adjusted EBITDA margin expansion. According to the group, net revenues were $403.4 million in 2020 and net income was $16.0 million.
Last year, vinyl liners accounted for 20% of Latham’s sales, covers for 21%, and fiberglass and vinyl-lined pools for the remaining 80%. The remaining 59%, according to the company, came from fiberglass units.
Featured Photo Credit: Albany Business Review
