Jandy and Zodiac Pool Care are poised to become one entity, the companies announced in April.
“The combination of Jandy and Zodiac Pool Care would create the most innovative, exciting and customer-focused company in the pool and spa industry,” said Jean Marc Daillance, CEO of Zodiac Marine, based in Issy-les-Moulineaux, France, in a press release. “In North America, the new entity would have one of the most extensive sales forces in the market.”
Last year, private-equity firm The Carlyle Group and The Zodiac Group jointly acquired Jandy’s parent, Water Pik Technologies. The firms established a holding company, of which Carlyle owns 80 percent and Zodiac, 20.
Now Carlyle and Zodiac have entered into discussions about transferring the latter’s Marine Segment, which includes pool equipment, over to the holding company, then combining it with Jandy. The equity firm would retain majority ownership of 72 percent.
If the transaction, which is subject to regulatory approval, takes place, Zodiac Marine would have an enterprise value of approximately 1.01 billion euros ($1.37 billion), according to the French producer, which also said its own investment would be about 90 million euros ($122.2 million).
The reorganization of Zodiac Marine’s corporate structure, led by Daillance, isn’t expected to occur before the end of the 2007 third quarter.
The manufacturers are each expected to bring their own strengths to the table, said Bob Rasp, president/CEO of Jandy, based in Petaluma, Calif. “Zodiac Pool Care’s global network, retail marketing expertise and product offerings are uniquely complementary to Jandy,” he said. “We are truly enthused about the potential new product development and innovation opportunities our combined resources should be able to generate.”
Manuel J. Perez de la Mesa, president/CEO of PoolCorp, a major industry distributor based in Covington, La., has similarly high expectations. His company stocks products from both manufacturers in its network of nearly 300 warehouses worldwide. He called it “a combination of two firms that are complementary to one another with very little overlap,” then added, “Combining the two will help them develop new products and become an even better manufacturer.”
Perez de la Mesa sees the possible move as a statement about the industry. “The fact that they are investing in this transaction serves as a testament to their belief that the pool industry is a young and dynamic [one] with tremendous long-term growth potential,” he said.
The companies could see yet another twist in the next few years, if speculation by Carlyle Managing Director David M. Rubenstein plays out. Rubenstein, who is also a co-founder of the company, recently told The Washington Post that he expects most major private-equity firms to go public in the next few years. He didn’t rule this potential out for Carlyle.
Zodiac Pool Care is the largest division within the Marine sector and sells in North America, Europe, Australia and South Africa. Besides its original line of cleaners and equipment, the company acquired several firms in the past few years, including automatic cleaner manufacturer Polaris of Vista, Calif., and aboveground-pool manufacturer Vogue Pool Products of Montreal, among others. Zodiac Pool Care moved its headquarters to Vista after the 2005 Polaris purchase.
The Carlyle Group is a global private equity firm with $56 billion under management. It invests in buyouts, venture and growth capital, real estate and leveraged finance on three continents.