A Florida-based hot tub manufacturer continued to expand its product line with the recent asset purchase of Infinity Spas.
Living Water Products, headquartered in Tampa, Fla., announced Oct. 24 that it had entered into a new agreement to buy the assets of Infinity. Terms of the deal were not disclosed.
“Our buy-in will be very strong. Even with the [current economic conditions], we believe this decision would allow us to become a major power player in the spa market,” said Living Water President Brad Tatum.
The assets purchase marks an aggressive bid by Living Water to increase market share amid shrinking sales industrywide. Just a month earlier, the firm signed a licensing deal with The Coleman Co., based in Wichita, Kan., to manufacture the firm’s branded hot tubs.
With this latest purchase, Living Water Products’ production capacity will increase to 35,000 spas annually. Company officials hope the deal places them firmly among the nation’s largest manufacturers — Sundance/Jacuzzi and Watkins Manufacturing.
“We’re excited about our prospects,” Tatum said. “We plan to produce more than 20,000-plus units for 2009. That’s a very conservative number [in anticipation of a down year].”
In April, the company, then known as Tatum Manufacturing, combined its business arms, including Gulf Coast Spa Manufacturers and Spa Services Inc., under the banner of Living Waters Products in an effort to streamline operations. In the ensuing months it acquired licenses from La-Z-Boy, as well as Coleman.
“Instead of contracting, we’re consolidating,” Tatum said.
Days after the purchase was announced, Infinity closed two factories in Johnson City and Elizabethton, Tenn., and laid off 150 workers. Living Water will retain the Infinity brand, but manufacture the spas in Florida.
Brian Quint, president of Renton, Wash.-based Aqua Quip, predicted an upsurge in consolidation if current economic conditions persist.
“If we don’t see consolidation, we’re going to see some manufacturers just downright go out of business,” he said. “We’re seeing an industry that is selling less product. We’re hearing numbers 10 percent to 30 percent down from previous years. It makes perfect sense that certain manufacturers are consolidating because of the economy of scale.”
In purchasing Infinity, Tatum saw an opportunity to grow his company’s mass retail business. The majority of Infinity Spas’ business is with big-box stores such as Sam’s Club, Costco and The Home Depot.
The firm plans to eventually establish two divisions, one focusing on mass merchants and the other on independent dealers.