CHARLOTTE, N.C. - Hayward Holdings, Inc. (NYSE: HAYW), a prominent player in the pool equipment and outdoor living technology sector, has announced the acquisition of ChlorKing, a leader in commercial pool saline chlorinators and UV disinfection systems in the U.S. market. This move is set to expand Hayward's commercial product range and reinforce its commitment to sustainable water treatment solutions.
ChlorKing is recognized for its expertise in on-site chlorine generation and commercial saline systems, as well as UV disinfection systems for pools and recreational water bodies. With over 17,000 installations worldwide, ChlorKing's technologies are poised to reach a wider audience through this acquisition.
Kevin Holleran, president and CEO of Hayward, expressed enthusiasm for the merger, highlighting ChlorKing's established market leadership under Steve Pearce and the potential for further growth and innovation in the industry. He emphasized Hayward's dedication to providing energy-efficient and user-friendly solutions for commercial pool operators and residential owners.
ChlorKing's notable contributions to the market include the NEXGEN chlorine generators, which are the first to produce pH-neutral chlorine on-site using the pool water itself. Their HYPOGEN line also offers hypochlorous acid generators for industries beyond pools, such as agriculture and food processing.
The acquisition marks a significant development for ChlorKing, according to Steve Pearce, who anticipates enhanced water safety and reduced operating costs for customers as a result of the partnership. John Collins, Hayward's Senior Vice President and Chief Commercial Officer, also welcomed the integration, noting ChlorKing's consistent drive for innovation since 1999.
ChlorKing will maintain its operations from its Atlanta, Georgia, facility, which houses manufacturing, product support, and administrative functions. The acquisition is expected to bolster Hayward's innovative portfolio and support its mission to transform the experience of water through exceptional products and solutions, all connected via Hayward's SmartPad™.
In other recent news, Hayward Holdings reported a slight increase in Q1 2024 earnings, with net sales growing 1% year-over-year to $213 million. The company also noted an expansion of its gross profit margins to 49.2% and adjusted EBITDA margin to 21.2%. Despite market difficulties, Hayward is sticking to its full-year guidance, forecasting net sales to increase by 2% to 7% and adjusted EBITDA to climb by 3% to 11% for the year.
The company has made strategic moves such as launching two new robotic cleaners and making a significant early debt repayment. Hayward's net debt to adjusted EBITDA ratio stands at 4 times, with a goal to lower it to 2-3 times within the year. Hayward anticipates a free cash flow of approximately $160 million for the fiscal year 2024.
Despite some disruptions in Europe and weaker market conditions in Canada, the company remains optimistic about its long-term growth prospects in the pool industry. It plans to capitalize on the pent-up demand for renovations in the pool industry and expects to return to sales and earnings growth for the full year. These are the recent developments for Hayward Holdings.
InvestingPro Insights
As Hayward Holdings, Inc. (NYSE: HAYW) embarks on its strategic acquisition of ChlorKing, investors and industry observers are closely monitoring the company's financial health and market performance. According to recent data from InvestingPro, Hayward's market capitalization stands at approximately $2.62 billion, reflecting the company's size and investor valuation in the competitive pool equipment sector.
InvestingPro Tips highlight that Hayward has maintained impressive gross profit margins, with the latest figures showing a robust 48.61% for the last twelve months as of Q1 2024. This metric underscores the company's ability to generate significant income from its sales after accounting for the cost of goods sold, which is particularly relevant as it integrates ChlorKing's technologies into its product offerings.
Despite recent market turbulence, with the stock having taken a significant hit over the last three months, resulting in a price total return of -18.27%, analysts remain optimistic. InvestingPro Tips reveal that analysts predict the company will be profitable this year, which could signal a turning point for investors considering the long-term value of Hayward's expansion and its commitment to sustainable solutions.
Moreover, the company's liquid assets exceed its short-term obligations, indicating a solid financial position to manage its current liabilities and potentially invest further in growth and innovation. This financial stability is particularly pertinent as Hayward aims to leverage ChlorKing's expertise to enhance its commercial product range.
For investors seeking a comprehensive analysis of Hayward's financials and stock performance, there are additional InvestingPro Tips available at InvestingPro. And for those considering an upgrade to a yearly or biyearly Pro and Pro+ subscription, use the coupon code PRONEWS24 to receive an additional 10% off.
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