Situation Overview

Founded 1971 by Eddie Epstein, Jet Line Products is a true family-owned and operated business, providing swimming pool equipment, chemicals and supplies to customers in the Northeast and beyond. As with many family businesses, the firm passed to Eddie’s four sons and, eventually, three of his grandchildren took over running the company. Under their leadership, Jet Line grew substantially, adding locations in Miami, Houston and Dallas in addition to its original locations in New Jersey and on Long Island. However, with Eddie’s sons nearing retirement, the Epstein’s decided to explore a sale of the business.

Sales Process

Jet Line engaged Carl Marks Advisors to explore the sale of the business with a two-fold goal: find the right buyer who would pay the highest price for the business that the family built up over 50 years and one who also would work closely with the third-generation of the family to help continue growing it.

With these key objectives in mind, the team at Carl Marks Advisors launched a process to identify the right partner to acquire Jet Line, reaching out to potential strategic acquirers as well as private equity firms. Pool Corp., the world’s leading wholesale distributor of swimming pool equipment, parts, and supplies, with more than 4,500 employees in 375 locations worldwide, quickly emerged as an interested party. After several meetings and, despite the family’s initial caution about the prospect of selling to a large competitor, Pool Corp. proved to be an excellent fit.

Unique Challenges

Like so many other transactions, COVID-19 had a major impact on the sale process. The go-to-market process for Jet Line had barely gotten underway when the global pandemic paused nearly all deal flow. However, the pool supply business benefited tremendously from the stay- at-home environment and Carl Marks Advisors was able to quickly reassess the available options and advise the Epstein family that the sale process could get back on track. Discussions with Pool Corp. resumed in late spring and the parties signed a Letter of Intent in July.

Ownership in Jet Line was shared by five families and organized into several different entities, each with a unique capital structure. These structures made it fairly complicated to discern Jet Line’s overall enterprise value and secure agreement among all the stakeholders. However, Carl Marks Advisors was able to work with the families’ lawyers and accountants to seamlessly structure a deal and bring it to a successful close.

Results

Although many industries struggled to remain afloat amidst the COVID-19 economic downturn, the summer 2020 season set records across the pool industry, as families decreased their travel and invested more in home-based recreational activities. Carl Marks Advisors was able to leverage this renewed investment in pools into a positive outcome for Jet Line and negotiate an outsized price for the family sellers.

Jet Line was acquired by Pool Corp. on September 30, 2020. The sale provided substantial liquidity for all shareholders and a great opportunity for the third generation members of the Epstein family to join the Pool Corp. management team and share in its future growth.