Hayward Pool Products set to become publicly traded

This article was written by Rebecca Robledo, deputy editor of Pool & Spa News and Aquatics International

View the original article: https://www.poolspanews.com/business/

Within the next few days, the parent company of Hayward Pool Products will launch onto the stock market.

With this change, all of the so-called “Big 3” manufacturers will be publicly traded.

While no date has been released, the initial public offering (IPO) is expected to occur this week.

The company has gradually ramped up to this point. In mid-2017, the manufacturer was purchased by three investing firms after more than 50 years of ownership by the Davis family. Hayward Holdings was formed as a holding company.

The three investors -- private equity firm CCMP Capital Advisors (former owner of PSN parent company Hanley Wood); MSD Partners; and Alberta Investment Management Corp. -- will retain portions of the stock, as will some Hayward management and others who invested before the public launch.

Since 2017, Hayward made some significant acquisitions, including smart device maker ConnectedYard and infloor pool cleaner producer Paramount Leisure Industries.

In 2019, the company hired President/CEO Kevin Holleran, who had experience running a publicly traded company.

In its filing, Hayward said it is banking on a number of factors to aid in its success -- its increasing emphasis on energy-efficient and environmentally sustainable products and smart technologies; expansion in North America and international markets where the company currently is under-represented; and continued interest in home improvements that has intensified amid the COVID-19 pandemic. Additionally, the company plans to increase its presence in the commercial market, having expanded its sales team in that arena. Hayward expects to grow both organically and through acquisition. The company estimated that 85% of its products are designed for energy efficiency, water conservation or reduction in chemical usage.

It historically has been rare to see pool/spa companies on the stock market. In addition to fellow “Big 3” manufacturers Fluidra and Pentair, Hayward joins PoolCorp and Leslie’s Pool Supplies.

More companies are taking an interest in the pool/spa industry, and not only because of climbing demand from the pandemic, says Greg Howard, president of industry buying group Carecraft. With millions of pools now installed, the growing need for replacements and renovation put to rest any concerns about seasonality or the industry’s susceptibility to economic conditions, he said.

“There’s a lot of interest on the part of Wall Street to invest in the pool industry,” Howard said. “I’ve never seen anything like this before.” In its Federal Trade Commission filing, the company reported some interesting data, including a sales growth in 2020 of 19.4%, to $875.4 million from $733.4 million in 2019.

That same year, its operating income margin grew from 13.5% to 14.2%; net income margin from 1.2% to 4.9%; and adjusted EBITDA margin from 23.5% to 26.5%.

Hayward says it holds 30% market share in North America.

Approximately 75% of its sales come from the aftermarket, the company said. It also stated that 81% of its sales come from North America, while the remaining 19% sales take place in international markets.

At the end of last year, the manufacturer had approximately 350 patents, with another 135 pending.