The retail/service franchise Poolwerx has taken on a private-equity partner.

It has partnered with Norwest, a global investment firm based in Palo Alto, Calif., with the purpose of fueling growth for the retailer in the U.S and overseas.

Poolwerx, which originated in Australia and has U.S. headquarters in Dallas, had been talking to potential private-equity partners since 2019, said the company’s chairman of the board, Troy Hazard. Back then, the firm spoke with 46 investment firms, then narrowed it to six that they believed made the best cultural and strategic fit, then began earnest negotiations with Norwest late last year.

“Over the last couple years there have been a lot of opportunity for these types of transactions, but we were more focused on the strategic opportunity, not just the fact that somebody wanted a partner and to put some equity into the business,” Hazard said. “It was more, ‘What’s that going to do, how’s that going to benefit our franchise partners, support our relationship with our supply chain, and add value without disrupting anything that we’ve created, but be there for the first phone call if we needed some support?’

“[Norwest] had a very similar vision of what they felt the business could look like in the next three to five years.”

In its search, Poolwerx wanted an investor whose portfolio had included franchises, retailer and service firms, if not specifically in the pool/spa industry, and who could offer guidance to help in its mission to offer leading-edge technology to support its franchisees, Hazard added. Norwest counts Junk King, a junk removal and recycling company, and The Learning Experience, a pre-kindergarten educational program, among its portfolio companies. The investment firm also has a system in place whereby leadership from portfolio companies can share strategies or addressing various issues and disciplines in running their businesses.

“That, for us, is exciting, because it continues to feed innovation and new ways to refresh and tighten the franchise system,” Hazard said.

Norwest chose to partner with Poolwerx because of its track record as a franchiser, the firm said. “Poolwerx is one of the few international franchise brands that has cracked the U.S. market as a result of its robust expansion processes, strong relationships with franchise partners and suppliers, and fiercely loyal customer base,” said Stew Campbell, a partner in the investment firm. “The company is uniquely positioned to capitalize on opportunities in the large and growing pool and spa market across products and services domestically and overseas.”

Poolwerx has created the new title of North American CEO, which has gone to former COO Andrew Kidd. “With 10 years of experience in leadership roles at Poolwerx, Kidd will bring his skills in franchising and operations to his enhanced role in the United States,” said John O’Brien, a founder of Poolwerx.

O’Brien, who had served as Poolwerx CEO, now takes the title of executive director.

The company has yet to nail down its long-term plans with the new investor. However, it does expect to focus more on converting existing independent pool/spa companies into its network, where most new franchisees had come from outside the industry over the last few years. Through the conversions it has in the process, the firm expects to enter three new states by mid-2023, Hazard said.

With the transaction taking place toward the end of the COVID-19 pandemic, this represents a long-term investment and outlook, Hazard said.

“With any of these processes... when investors come in, they always in due diligence have to look for that ‘sugar hit,’ and if COVID were considered a sugar hit for an investment firm... they take those sorts of things into consideration,” Hazard said. “In our opinion, it would be a naive investor that did not consider that COVID was an anomaly, and that anomaly needed to be put into the overall longer-term vision, picture and strategy for development. To that end Norwest saw enormous future potential in the business, largely because of how we’ve both managed and capitalized on the last two years.”

Poolwerx currently has approximately 30 franchisees in nine states in the U.S., with 350 throughout its service area of Australia, New Zealand and the U.S.