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 entirely private.
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
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