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Sunday, July 14, 2024

North Carolina swims into pool industry leadership

These hot mid-summer days make it peak time for swimming pools. It seems that folks with sweet backyard setups are usually the most popular folks in the neighborhood.

Meanwhile, there’s been a surge in pool installations since the pandemic, which has provided a big boon for an industry with a big North Carolina presence.

Hayward Holdings moved its headquarters from a New Jersey suburb to Charlotte in 2021. The company had annual revenue averaging $1.35 billion over the past two years, doubling from 2019 as demand for pools shot up during the pandemic.

Hayward’s revenue is second to Pentair among U.S. pool equipment manufacturers. The London-based company bases its pool segment’s headquarters in Cary. Pentair had annual revenue of $4.1 billion last year, including $1.6 billion for pool products.

About 800 of Hayward’s 2,000 employees work in Clemmons, where it has a manufacturing plant that makes pumps, filters and cleaners. It has other plants in Rhode Island, Tennessee, Spain and China.

Hayward CEO Kevin Holleran joined the company in mid-2019 after previous stops at Textron and Ingersoll Rand. He credits the following factors for the pool industry’s growth:

  • More remote/hybrid work
  • Migration to the southern U.S.
  • Health, exercise and well-being benefits
  • Enhanced property values
  • Excellent space for entertaining.

Hayward’s move to North Carolina coincided with its initial public offering in March 2021.

Shares came out at $17 and traded for more than $20 during 2021, but they have slumped in the past 18 months as demand for new pools plateaued and Hayward’s customers reduced their inventory. Hayward closed Wednesday at $12.33.

The company’s principal owners remain the same after the IPO: the BDT/MSD investment firm owns 34% of shares, while CCMP Capital Investors controls 14%, according to the company’s proxy. (MSD Investment is owned by computer tycoon Michael Dell.) Both companies are based in New York.

Despite its stock price slump, Holleran says the pool industry offers great potential because Hayward gets 80% of its revenue from “upgrading, replacing and remodeling” existing pools, with the balance for new pools. “One of the unique things about pools is that the aftermarket is really important,” he says. “Once you build a pool, if something breaks, you are not going to drain it or let the water turn green.”

I asked if water shortages are causing fear in the pool industry. But Holleran notes that research shows that if one covers a pool, it can use half as much water as a lawn in the same spot. He cites other efforts at energy efficiency and improved filtration, while noting Hayward helps some owners treat water with salt rather than chlorine. That’s better for the environment and one’s swimming suit, he notes.

“We have a really talented engineering team that’s working hard to continue innovating.”

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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