A day with NPP to see just what consolidation will mean for the industry
One of the weird things I didn’t realize would happen after I bought the magazine is that occasionally I’d get calls from private equity firms searching for insights into the pool industry. Typically, they’d reach out, we’d chat on the phone for 15 minutes and I’d never hear from them again. However, when Raj Patel from Imperial Capital Limited called me a few years ago, we had a surprisingly long conversation. Then another, then another. Patel stayed in touch, and it became apparent that not only were they serious about entering the pool service industry but they were also committed to developing industry relationships.
When National Pool Partners launched in 2020 with the announcement it had purchased Patriot Pool & Spa in Austin, Texas, all those conversations clicked into place. Over the years, I had gotten to know both Patriot and the company’s owner, Hal Denbar, well. NPP may not have been the first consolidator to enter the industry and it certainly wasn’t the last, but it got the industry talking.
Three years and a pandemic later, NPP and other consolidators have started to change the landscape of the pool service industry. We thought it was time to dig in a little deeper. And who better to do that with than the ones we know best? The following is what my day at NPP looked like, and what I learned. Other than lunch (no one ever lets me buy lunch), NPP didn’t cover any of my travel expenses or dictate what appears next.
— Megan
A Sticky Drive in Florida
It’s the second week in May of 2022, and it’s already hot, both in Cape Coral, Florida, where I arrived late on Sunday night and in Norman, Oklahoma, where I live. With a lot of calendars to coordinate, this is the second attempt I’ve made to get down south and visit NPP. Bryan Banta, an NPP founding partner and president of its Florida region, drove two-and-a-half hours across the state to Cape Coral from his home base in Fort Lauderdale, Florida, to be my NPP tour guide. Since my trip, Banta has transitioned to a new NPP title as co-founder and board advisor. He picks me up at my hotel in his Tesla — the one thing he says he bought for himself when he sold his business, B & B Pools, to NPP in May of 2021.
Banta and I have spoken before but don’t know each other well. We use the 20-minute drive to Pool Doctor Service & Supplies, the NPP flagship for this area, to make sure I’m caught up on his backstory. His dad started B & B Pools in 1987 as a one-poler and grew the business with Banta’s aunt who eventually joined his father as a partner.
“I grew up in the industry, cleaning pools all the time, and quite honestly, I was so over it as a kid that I wanted to be out,” Banta says. “There are only so many times you can be taken to school in a pool truck until you’re like, ‘I am never doing this again.’ I was so mortified as a teenager.”
He went to college at Samford University in Birmingham, Alabama, and fell in love with the state — and a girl. After which, he started a career as a financial planner for Merrill Lynch. “I had no intention of coming back [to Fort Lauderdale],” Banta says. “I enjoyed my job. I got married, had a couple kids. We were living in this great community.”
Then Banta got a call from his dad that shocked him. His aunt was ready to retire, and they had decided to sell the business. The deal was already done; they were just waiting to close.
“It wrecked me,” Banta says. “I was just like, ‘What? This is your legacy.’ And being a financial planner, I was looking at the numbers thinking ‘This doesn’t make sense. You’re not getting any value for this. There’s such a great income in this business; you’re not getting near enough to offset the value of that income.’ ”
Wouldn’t you know it, that deal fell through. Banta and his wife decided they were willing to make the move to Florida if his dad would have them.
“I said, ‘If you had a partner, would you stay in it?’ ” Banta recalls. “And he’s like, ‘Yeah, but I don’t want to go find some random partner.’ I said, ‘No, I’m talking about me.’ ”
So, in 2014, Banta bought out his aunt, moved his family to Florida and found he had bought into a great 25-year-old business. “In every way possible,” Banta says. “Everything was 25 years old, the processes and the paper. Everything.”
But it was an exciting challenge to update the business. He went to work hiring and increasing its capacity. “And we grew, implementing technology pieces that made it easier to do business with us,” Banta says. “The business had a great reputation. I was able to build on that and then bought my dad out a few years later.”
Banta had a 15-year plan, he had goals and he had no intention of selling his business. Then he got a phone call from an old friend, Hal Denbar.
It was another call that shocked Banta, so much so he had to pull over to the side of the road. Denbar told him he’d sold Patriot and had helped found NPP. Now, NPP wanted Banta to join and that call was the start of a monthslong courtship where Banta finally came around to selling B & B.
“There was so much alignment with what I was trying to do with my business and what I thought the industry needed,” Banta says. “And looking at this group of people they had put together, I thought, ‘These guys actually have a chance to do this. They have a chance to make a meaningful impact on the industry that me as a small business owner in Pompano Beach, Florida, would never have’ … The idea of being a part of something bigger is what got me over the hump.”
The acquisition was announced in May 2021, and Banta started his new role at NPP.
“[The executive team] gets a chance to solve unique problems to our industry but at scale,” Banta says. “We have companies that have thousands of pools but each one of those businesses is so wildly different. I enjoy being able to think through and use our experience to say, ‘You know that may work in pest control or HVAC, but that may not work here, and here’s why … But here’s how we can maybe twist it to make that work.’ We’re achieving a scale that very few [pool service companies] have ever gotten to. So, we’ve got unique problems.”
Size Matters
Everything that NPP talks about doing requires it to be a certain size, and so from 2021-22, NPP engaged in a flurry of big and small business acquisitions to reach the tipping point. At the start of 2021, NPP was composed of two companies, Patriot and T&D Pool and Spa. By 2023, NPP had acquired 17 businesses.
Since most of that happened during the pandemic, there were extra challenges including getting all those businesses under the same umbrella with the same accounting and management software, the same insurance and employee handbook and the same titles — “We had over 60 different titles for pool tech and repair tech,” says Harry Geller, vice president of human resources at NPP. “We’re down to 12 now.”
“These small businesses run a certain way for all these years,” Banta says. “And then we come in and, like it or not, there’s change that comes. It’s positive change in most cases because we can bring money and resources to the table and benefits to employees and all these things. But change is hard.”
The company I’m spending most of the day with, Pool Doctor, was one of two businesses — along with Magnolia Pool and Spa — NPP bought in the Naples, Florida, area the same week in November of 2021. Pool Doctor was one of the rare cases where the business was mature enough that the owners, Mark and Barbara Forster, were hands-off and not heavily involved in the day-to-day operations. Those fell to Robert Daniels, who is now director of continuous improvement at NPP.
“When you’re doing due diligence for a company, you don’t have a whole lot of visibility into the staff,” Banta says. Even if the business is solid and NPP has investigated the company culture, when it comes to individuals performing their jobs, NPP doesn’t know what it’s getting until it shows up to announce that it is the new boss.
“You acquire a company, [and] the employees get told that we’re coming in,” Banta says. “We do as much due diligence as we can to meet the key people if the seller will give us access. But not every person is a cultural fit for what we’re looking to do.”
As we pulled into Pool Doctor’s parking lot, Banta pointed out the unique branding and trucks for the company — though the highlighter-yellow-colored vehicles were impossible to miss. The trucks were a good example of the headwinds NPP was facing.
“We bought a bunch of businesses, and we start looking at the fleet and realized we need trucks,” Banta explains. “We put an order in for 190 trucks and Toyota just laughed at us. They said, ‘No, we’re not going to take the order.’ I’m like, ‘What do you mean?’ ”
The pandemic shortage made it incredibly difficult to source trucks. Instead of building a fleet of identical vehicles, the company began searching the country for any type of truck it could find. It was a job perfectly suited for Eddie Skehan, former owner of T&D Pool and Spa Service and during my visit was vice president of operational excellence at NPP.
“Eddie’s just sourcing trucks all over the country: Maryland, Denver, it doesn’t matter where it is,” Banta says. “We got about 40 trucks that way. Some of them were Tacomas, some of them were Nissans, some of them were Ford Rangers.”
The EOS Way
There were high-level issues that NPP dealt with to integrate these separate businesses, but at the same time, they still had to get out and clean pools every day while managing the operations of each location. That involved putting a management structure in place, but communication was a huge hurdle.
NPP follows the entrepreneurial operating system model — or EOS — to run its business, and as such, its leaders get together each week for a “Level 10” meeting. I watched as, over Zoom, the Florida branch managers went through a structured meeting format.
Each meeting starts with a team member sharing the best thing that happened to them last week, both personally and professionally. They talk through any safety issues that occurred the previous week — that day: a pulled groin muscle while putting salt in the back of the truck, and an employee got chemical sprayed in their eye. After that, they move onto the scorecard, where they go through each location’s KPIs, seeing where they hit their marks, and where they didn’t and delving into the reasons why.
“We actually see a lot of things that are very, very similar across regions,” Banta says. “But there are things that are different as well like pool counts, for example, or the number of pools per tech. In Texas, if you’re doing 40 to 45, that’s great. But here [in Florida], our prices are so low and the pools are smaller and so close together, my guys are doing 80 to 85.”
One number they spend quite a bit of time chatting about is the employee head count. They recently hired a recruiter for the region because the constant hiring process was taking up too much time. After looking at which locations lost or gained people — there was an addition or subtraction at every location — the result shocked the team.
“These are very encouraging numbers,” Banta says. “We might need to record this moment in history. I don’t know if over the last year that we’ve ever had zero uncovered routes at all five branches in Florida.”
Next, they review service accounts and find the net number of accounts are down, which wasn’t unexpected as NPP is slowly rolling out price increases across locations.
“When we did our price increase modeling, we forecast out what [customer attrition] might look like so we can plan for it,” Banta says. “So, these are in line. Obviously, no one likes to see us lose customers.”
Banta explains that when they lose customers to a price increase, they are left with more valuable customers and often higher revenue.
For instance, that week Pool Doctor lost 23 accounts and added 23 accounts: a net zero. “But we increased the annual revenue by $7,000 just because we took in customers at our new price point,” Banta says. “So, that’s good news.”
Branches that went through the price increase earlier have reached the point in the cycle where customers it lost to the increase are now returning because they were unhappy with their new service company. Meanwhile, another branch had just implemented the price increase and expected quite a few customers to jump ship once their current pricing finished at the end of the month.
Going over the numbers for repairs, the discussion gets more complicated. They evaluate the ratio of repair technicians to revenue as well as the repair margins for the week, but not all the numbers made sense or tracked with its history. As they work through the questions, it turns out there are some input errors, but the Pool Doctor’s margins were particularly high that week because they had installed several heat pumps. Between vacation time, difficulty getting materials and being understaffed in repairs, repair revenue for the week was “light,” according to Banta.
The final repair number they looked at was days out, which they want to be under five. Most locations came in fine, but Pool Doctor was averaging eight to nine days to get repairs completed.
“We’re leaving money on the table,” Banta says. “We’re not servicing our customers fast enough. I think we need to add a repair guy here.” Easy to say but not necessarily easy to do. They discuss finding a new employee to fill the job but also ask if there are current service technicians who may be looking to move into repairs. They talk about whether the branches can share repair techs and shuffle them to keep up with the work.
Then comes a fun one: overtime.
“Overtime has been pretty ugly,” Banta says. Now that they have all routes covered and have people in training, Banta says he wants to see the overtime expenses come down. And this is one area where the people on the call, as managers, can make a big difference by checking hours during the week and trying to keep people out of the field once they’ve worked their full time.
We had $170,000 overtime in one month for the state of Florida. That number is mind-boggling. We could have put 50 people on staff for that amount of money.”
Bryan Banta, National Pool Partners
“We had $170,000 overtime in one month for the state of Florida,” Banta says. “That number is mind-boggling. We could have put 50 people on staff for that amount of money.”
At that point, KPIs are done and so is my access to this meeting. Continuing the EOS process though, next the group reviews their “rocks” or long-term goals for the next few months. After that comes the to-dos for the week. Then they go over people headlines, sharing who was hired, who is getting a promotion, etc.
Finally, “The meat of the meeting is called IDS [identify, discuss, solve],” Banta says. Problems are brought up and discussed as a group. “The idea is to have this brain trust conversation as a group of leaders in the state.”
Last, but certainly not least, everyone rates the meeting. “We want a brutal rating,” Banta says. “The idea is: Be honest and truthful, and rate the meetings on how things go.” The rating forces the team to think critically about the value of the meeting and how they’ve added value individually. It forces them to think about keeping it relevant and not waste time in perfunctory rituals.
These weekly meetings last one and a half hours on the dot. If something doesn’t get covered, it’s moved to the next week. It’s done by each region as well as the executive team.
“The KPI call is one of my favorite calls of the week,” Banta says. “Because it gives me a chance to go over the numbers. But I want the branch managers to own their stuff. ‘It’s your responsibility; you own this branch. I want to support you. Let’s talk about how we can fix the issues that come up, but I want you to own your people and your process.’ ”
The branch managers report their numbers on Monday and the report is prepared to go over on Tuesday. Then on Wednesday, Banta gives the same report to the operations team, including Augusto Titarelli, the CEO.
Each week the branches are ranked against each other regionally and nationally. “They get to see how they stand against all the branches in Florida on all those metrics we looked at,” Banta says. “And also, how do they stack against Texas? It’s a lot of pride to be able to say, ‘Aloha is at the top of the list’ or ‘Pool Doctor.’ ”
Hunting and Gathering
With its first few acquisitions, NPP was very strategic. They wanted large, well-known service companies with name recognition in markets they knew could succeed. Most of those flagship companies kept their names and branding under the NPP umbrella.
Of course, the acquisitions are still strategic; but since those early days, the company has purchased businesses of all sizes. Some would still be considered a flagship for the area, but others immediately have their assets, people and routes absorbed under a flagship brand.
“Now that we’ve got a flag planted in lots of geographies, the fun part is what can we add on within those geographies,” says NPP’s then director of business development. “And the sky’s the limit.”
The director of business development had the job of finding prospective businesses and taking them through the valuation process, which can be tough for business owners.
“It’s their baby, right?” the director says. “In most cases, this is the only job they know. They grew up in the family business.”
As he evaluates a business, he looks for warning signs that it may not be a right fit for NPP. One of the big ones is high employee turnover. NPP expects turnover in the business to be around one-third, but if a company’s turnover rate is 80% or higher, there’s probably a big culture problem.
Other red flags are books that are a mess and businesses that haven’t kept their prices up with inflation. “If you don’t have your house in order and your pricing isn’t right, your purchasing isn’t right and your inventory controls aren’t right. Then, I’m valuing it based on bad numbers and not reality,” the director says.
Another big hurdle during the acquisition process is figuring out what to do with the old owner. Sometimes, they are ready to walk away and retire, but that’s not always the case and not always what NPP wants or needs. That being said, it can be tough to run a business you no longer own. Most of the people I met with had sold their businesses to NPP and moved on to work at the company in a different capacity, which sounds great but requires a passion for what NPP is doing.
“We don’t need a whole bunch of VPs who want to sit in an office and be retired,” the business development director says. “We’re in high growth. We need people to work — these guys are at it 24/7. So, if they think this is going to be a cushy job and they’ll get a title and a business card, that’s not who we are.”
Geller, who sold his company Magnolia Pool and Spa to NPP in November 2021, now helps run NPP’s HR department, which he had experience doing at a large corporation before he landed in the pool industry.
Skehan thought he was ready to walk away from the business and retire when NPP came calling. During COVID-19, he and his wife reevaluated their lives and were ready for less stress.
“[The business] was running on cruise control,” Skehan says. “There was really no challenge. And some of the challenges that were there, we couldn’t tackle independently.” Skehan’s business had gotten to the point that if he wanted to achieve any more growth it would have taken a large investment into the corporate side of the business: hiring a human resources manager and marketing manager as well as other similar positions.
Though he was ready to sell his business and was receiving two to three calls a week from private equity firms, Skehan was turned off by their sole focus on the bottom line.
“The only thing they were concerned about was profitability,” Skehan says. “They didn’t care about the customers. They didn’t care about the employees. They don’t care about culture. All it is, is about the dollar.”
Sitting in meetings with NPP, however, got Skehan excited about the pool industry again. “I could still do the stuff that I like to do but not have the pressure,” Skehan says. “And my kids are set up. If something happens tomorrow, I know everybody is taken care of.”
It fell to Skehan to figure out procurement during the pandemic shortages, where he was able to use the relationships he’d built after 30 years in the industry to solve problems. “The purchasing negotiation, pricing and sourcing? That’s where I thrive,” Skehan says.
Since my visit last May, lots has changed at NPP. “2023 is really an operational year,” says Titarelli, NPP’s CEO. The M&A team has been disbanded since NPP isn’t focused so hard on buying businesses. And it’s reorganized. Banta and Skehan are still investors and advisors to NPP, but neither are involved in daily operations anymore. However, they both serve on an official advisory council, which is made up of former business owners who have sold to NPP.
Industry-Wide Solutions
As NPP tackles the challenges of building the largest service company in the United States, it’s not far from the leaders’ minds that the rest of the industry faces similar — if on a smaller scale — challenges. In many ways, NPP hopes it is building a template for how all pool service companies will be run.
“The biggest challenge that we have — and I think would be rewarding to be able to solve — is the employee issue,” Skehan explains.
Skehan believes all industries, not just the pool industry, need to rethink how it manages employees as the desire for more flexible work hours makes jobs outside of service increasingly attractive. It’s a problem he is excited to see innovative solutions for, even though he doesn’t yet have one.
One thing Skehan does see a solid solution for is training. “Eddie’s building a training curriculum that I think ultimately could be super powerful for our industry,” Banta says.
Skehan’s goal is to build an education program that fits how most service technicians learn.
“We’re trying to make it kind of playful,” Skehan says. “Not like they’re sitting in school. That’s more gamified. You’ve got just a few minutes to capture them.”
For his part, Geller is hoping benefits become the rule instead of the exception.
In the pool industry, it’s almost unheard of [to have benefits at all] — a paid time off program, dental, vision, retirement program. And that helps attract people …”
Harry Geller, National Pool Partners
“NPP has a terrific benefits program,” Geller says. “In the pool industry, it’s almost unheard of [to have benefits at all] — a paid time off program, dental, vision, retirement program. And that helps attract people, but it also helps retain people.”
After lunch, it’s back in the Tesla to head to the airport. I squeeze in all the follow-up questions I can think of as we drive, but it’s been a long day, and we’re both pretty shot. For a pool nerd like me though, it’s been fun to see the industry in action. In fact, it was almost too much information to distill into a comprehensive article. And that’s a little bit of how it feels for NPP right now too.
“We knew that we would have some of these challenges since a lot of us are pool guys,” Banta says. “We built the frame of a plane, we took off and now we’ve gotta finish it before we land — while we’re in flight. We’re building the plane as we go.”
