Another acquisition by Fluidra will now place it solidly into the deck- and commercial-products markets.
The company, one of the industry’s “Big 3” manufacturers, purchased Canby-Ore.-based S.R. Smith from private-equity firm Champlain Capital, of San Francisco and Boston. It was valued at $240 million, according to Fluidra.
This marks Fluidra’s third acquisition in 2021. In the first quarter, it purchased Built Right Pool Heaters, as well as Custom Molded Products (CMP), which brought with it a number of brands and product categories.
S.R. Smith CEO Rich Laitta will remain with the company for the time being.
“This latest acquisition of S.R. Smith doesn’t just move us one step closer, it propels us,” said Fluidra CEO Bruce Brooks.
In addition to deck products and accessories, the 89-year-old firm manufactures commercial components such as starting blocks, rails, ladders, slides, diving boards, ADA-compliant lifts, swim-wall systems, thermal cover systems and in-pool furniture.
“This acquisition was very complementary,” said Troy Franzen, president of Fluidra North America, based in Carlsbad, Calif. “If you look at our product portfolios, there was virtually no overlap… so [the acquisition] makes a lot of sense to round out what we can offer our customers.”
This move represents another step in Fluidra’s strategy to gain market share in the commercial market, for which it had already begun developing products in-house. “[S.R. Smith has] presence in commercial, where we’re just starting, so it’ll help jump start commercial,” Franzen said.
In addition to carrying the firm deeper into these product categories, the acquisition will help Fluidra expand its presence in certain global markets, particularly Australia, where S.R. Smith has several manufacturing locations, and the southern hemisphere. As the dominant player in Europe, Fluidra likely will increase the visibility of S.R. Smith product lines on that continent.
Much will remain business-as-usual for S.R. Smith. Branding will remain the same. While the company doesn’t always approach its acquisitions that way, it made sense in this case, Franzen said.
“We think the brand has a ton of value — it’s very well recognized with not only the trade but homeowners as well,” he said. “I think their brand kind of stands for the products they sell, and we feel it would be a disservice to not take advantage of that great asset.”
S.R. Smith CEO Rich Laitta will remain with the company for the time being, primarily on a consulting basis. When he does depart, S.R. Smith COO Brett Fritts will head the operation. The entire S.R. Smith staff is expected to remain in place, Franzen added.
With the purchase, the publicly traded Fluidra adjusted its 2021 guidance upward: Sales growth is projected to increase 37 to 42%, up two points from previous expectations.
Fluidra, which merged with Zodiac Pool Pool Systems in 2018, is traded on the Madrid Stock Exchange. The firm reported record performance in the first half of 2021, closing Q2 with approximately $1,409 million in sales, representing a year-over-year increase of 54%. Net profits tripled over the same time in 2020, at approximately $207 million.
North America showed the strongest performance, the company said, with an 84% increase from the first half of 2020. Globally, the residential operation saw a sales increase of 68% year over year. The firm’s commercial sector increased 15% year over year, which it partially attributed to an increase of projects in planning. Fluidra’s Water Treatment sector rose 30% year over year.
The company expects another strong year in 2022, for itself and the industry at large.
“I think there are a lot of permanent positive economic changes that are here to stay,” Franzen said. “I think the pie is getting bigger.
Builders are reporting backlogs of a year or more, he observed, and pools built during the boom of the 1990s and early-2000s are reaching renovation age.
“I think some of the dynamics with people moving from the city to the suburbs is real – that’s not a one-time event,” he said. “I think with the consumers’ psyche around staycations and investing in your No. 1 asset – your home and backyard – is going to continue. As people move to the suburbs and try to create their own paradise, let’s hope they all put a pool in the backyard!”
