Another pool company will be represented on the stock market.
The parent company of fiberglass- and vinyl-liner pool manufacturer Latham, the Pool Company filed with the U.S. Securities and Exchange Commission stating its intent for an initial public offering of its common stock.
The Latham Group has applied to list its stock on the Nasdaq Global Select Market under the ticker symbol SWIM. It is not known yet when or if the offering will be complete or its terms.
The development comes a month after a similar announcement by “Big 3” manufacturer Hayward.
Formerly known as Latham Pool Products, it now goes by Latham, the Pool Company.
More than 50% of the voting power of the company’s outstanding common stock will be owned by Latham’s private equity partners, Pamplona Capital Management and Wynnchurch Capital, making the Latham Group a controlled company exempt from certain corporate governance requirements.
In describing the company’s strengths and benefits, Latham described a strategy to increase the overall market share of fiberglass among inground pools, change how consumers come to its products, boost its distribution capabilities throughout the U.S. and grow internationally.
The company has placed an emphasis on its efforts to connect directly with consumers through direct digital and social-media marketing backed by a demand-aggregation platform. This reverses the paradigm where the dealer generally leads sales to the manufacturer, the company said. Based on this strategy, Latham said, it delivered more than 45,000 consumer leads to its dealer base in 2020, the first year when the strategy was in full swing. The company said this represents a growth of 210% from 2019.
The company also touted its scale, saying that its network of nine fiberglass-pool factories and distribution centers enables it to deliver fiberglass pools within two days to 95% of the U.S. population.
Over the years, Latham has grown its fiberglass market share by acquiring a number of fiberglass-pool manufacturers. But in its IPO application, it pointed to three recent transactions that it expects to position it well in the future.
The 2019 acquisition of Australian fiberglass-pool manufacturer Narellan, which also operates in Canada and New Zealand, boosted its international presence. According to Latham, 19% of its sales come from international markets, with the most representation in Canada, Australia and New Zealand. Latham said it is always looking for opportunities to enter new countries.
At least as significant, the Narellan purchase is expected to help Latham expand its reach in North America by boosting penetration of the fiberglass category. As Australia’s largest producer of fiberglass pools, Latham said, Narellan played a key role in the increased adoption of fiberglass over the last two decades in Australia, where the category currently represents 70% of the pool industry. “Leveraging insights gained from Narellan, we are investing to build the tools required to drive higher fiberglass penetration in the North American market,” Latham said.
Additionally, it said, the October, 2020 acquisition of vinyl-liner and safety-cover manufacturer GLI has increased its offerings in those categories.
Also last October, the company entered into a long-term strategic partnership and acquired a 28% equity interest in the pool-construction franchise Premier Pools & Spas. “The purpose of this investment in Premier Pools & Spas is to help expand our sales and distribution channels,” the company said.
It plans more strategic partnerships with dealerships in the future. “We believe these exclusive relationships will continue to enable us to increase market share at the expense of the fragmented and regional universe of competitors,” Latham said.
Latham said it’s the largest designer, manufacturer and marketer of in-ground residential swimming pools in North America, Australia and New Zealand. It reports holding 32 facilities and employing more than 2,000 individuals, and having sold more than 8,700 fiberglass pools in the U.S. in 2020.
It said 2020 marked the 11th consecutive year of net sales growth and adjusted EBITDA margin expansion, although “net income does not adhere to this trend.” In 2020, the company generated $403.4 million in net sales and $16.0 million in net income, the company reported.
Last year, approximately 20% of Latham’s sales came from vinyl liners, 21% from covers and the rest from its fiberglass and vinyl-lined pools. The company said most of that remaining 59% came from fiberglass units, but didn’t specify the breakdown.
