BRS acquires Marine Depot? WOW!

[Tuffyyyyy]

A philosophy? Riiight, a private equity firm just stepped in and gained market share by erasing a competitor, they didn't let the market (customers) decide, and you think this is a philosophy and not experience speaking ? Are you even paying attention to what's unfolding right before your own eyes ?
Their first move wasn't to gain market share by making BRS better, it was to take away the competition.

I'd agree with this if BRS were totally bought out by the PE firm but I'm guessing that this ends here. Obviously, if they took over controlling interest then we'd be looking at BRS acquiring literally everyone in this sphere. My interpretation is that BRS had been eyeing this acquisition for some time and needed the capital infusion to complete it. I'll panic if they scoop up SaltwaterAquarium next.

 

[attiland]

MD sold out, no one put a gun to their head hehe

I’m Gonna Make Him An Offer He Can’t Refuse. ​

 

[wareagle]

I'd agree with this if BRS were totally bought out by the PE firm but I'm guessing that this ends here. Obviously, if they took over controlling interest then we'd be looking at BRS acquiring literally everyone in this sphere. My interpretation is that BRS had been eyeing this acquisition for some time and needed the capital infusion to complete it. I'll panic if they scoop up SaltwaterAquarium next.

BRS would need to prove they can run what they have now before buying anything else. They no doubt have the numbers on what MD was making and how much more it will be worth by pulling it out of CA. The exodus from CA is amazing to watch in real time, I bet the only reason they were able to buy MD was because of the terrible CA business climate. I'm more worried about the coming inflation than anything else, things are going to get tight.

 

[Cell]

Hostile takeover? You watch too much TV. You also have no clue what leverage was used in the sale if there was any at all because it's all kept private.

"Erasing a competitor."

Your words, not mine. And if you were paying attention you would know Ken Wong has been trying to sell Ryan his business since 2015.

 

[rtparty]

Well, here's their reply. I guess we'll have to see what they're "putting together", as you suggested...

Hey there,
Thank you for reaching out to us! BRS will not be honoring the lifetime filter promo from Marine Depot. We do have regular sales on our BRS filters pretty frequently.

Please let me know if you need anything further and take care!
Matt

Just relaying the latest news directly from Adam. Maybe nothing is put together in the end? I don't know. But for now, there is 15% off all BRS RODI kits and it runs through the end of September IIRC

 

[rtparty]

"Erasing a competitor."

Your words, not mine. And if you were paying attention you would know Ken Wong has been trying to sell Ryan his business since 2015.

I wonder if the haters woud be happier if Petco bought MD? Because they have such a great reputation in this area...

Truth is, Marine Depot was selling. This has been going on for years. I think I first heard about it back in 2014 or 2015 (maybe earlier?) when I was talking to someone who had been contacted by MD about buying them. Hearing from some people very close to all this and it sounds like MD employees were all expecting this sale for years. It is why a lot of them have left recently.

So, would people be happier if MD just straight up closed? Let Amazon buy them? As far as I can tell, BRS was the ONLY company in this industry large enough to acquire MD. Any other company would have come from outside the industry. I am sure that would have gone over really well ;Hilarious

 

[Tamberav]

Just a thought... but it's possible MD was already looking to sell and BRS just happened to be the buyer. We really don't know.

 

[wareagle]

"Erasing a competitor."

Your words, not mine. And if you were paying attention you would know Ken Wong has been trying to sell Ryan his business since 2015.

Yes, MD is clearly shutting down because they were just purchased, you clearly know that.

I don't care about how long MD's owner has been trying to sell, it's irrelevant.
MD will be no more, and BRS had to partner with a PE firm to make it happen.
That PE firm isn't going to stop here, it even says that on their website, incase you don't understand what a PE firm is and what they do.

They're going to want more revenue, more transactions, and the value of each transaction will have to go up. That's the order value per transaction, and the value as a percentage to them. That would be customer money, which means less value for the customer.

 

[FishyFishFish]

Not necessarily less value for the customer.

I remember watching a programme about the cost/quality of wine. Sometimes the cheap wine you get from the grocery store is actually a higher quality than the more expensive wine sold in specialist merchants. The reason for this is the vast size of some of the big grocery store orders. How much profit do you think McDonald's makes on each burger? Globally, they still make a lot of money.

High revenue can be achieved with a huge number of small transactions, a small number of huge transactions, or a moderate number of moderate transactions. A company wanting more revenue/profit could be good for customer value as they could use that to obtain more customers. They don't necessarily need to hike prices or drop quality.

I would love to buy from a LFS but there isn't one where I live and I am sure that many people are in the same position as me. Having big, professional, online stores such as BRS (and others) for me to buy my stuff from is awesome.

 

[Sleepydoc]

A philosophy? Riiight, a private equity firm just stepped in and gained market share by erasing a competitor, they didn't let the market (customers) decide, and you think this is a philosophy and not experience speaking ? Are you even paying attention to what's unfolding right before your own eyes ?
Their first move wasn't to gain market share by making BRS better, it was to take away the competition.

Yes, MD is clearly shutting down because they were just purchased, you clearly know that.

I don't care about how long MD's owner has been trying to sell, it's irrelevant.
MD will be no more, and BRS had to partner with a PE firm to make it happen.
That PE firm isn't going to stop here, it even says that on their website, incase you don't understand what a PE firm is and what they do.

They're going to want more revenue, more transactions, and the value of each transaction will have to go up. That's the order value per transaction, and the value as a percentage to them. That would be customer money, which means less value for the customer.

But it is relevant. Are you paying attention to what's happening? Your version of the events is a private equity firm bought a [controlling] stake in BRS and they are now moving to [ruthlessly] acquire and eliminate all the competition, but we actually have evidence to the contrary - insider reports that Marine Depot was in poor financial condition, that employees were actively leaving the company and that the owner was looking to sell, specifically that the owner had approached BRS 6 years ago to sell, well before any private equity firm came on the scene. If MD was in dire straits and on the way out then they would either be bought out by someone or close their doors and liquidate. As @rtparty said, better BRS than Amazon or Petco.

It may well be that the equity partner provided capital to do something that BRS wanted to do but couldn't without the capital. It may also be that the value of MD had declined over the past 6 years and BRS would have acquired them anyway, or it may be that the equity firm was pushing BRS to expand. There's actually evidence for the first two possibilities. The third possibility is supported only by assumptions.

 

[mike550]

So I’ve let this thread run out for a while to read a lot of comments. It’s good to know that I’m in the concerned majority. Just a few thoughts to share.

• It doesn’t really matter how MD got acquired by BRS. Fact is we’re now left with a big online retailer with less competition. I’ll guess that the strengths of MD won’t make it to BRS. I’m also expecting to see less variety of items in the combined offering.
• My guess is that this PE firm is going to try and roll up several online stores and then sell the whole thing in 7-9 years to a Petco or something. Remember, PE firms invest in companies only to sell them later. That‘s how they make money.
• We will probably see the familiar faces around for a couple of years while they are under contract to maximize how much they make from the sale, and then “poof” gone

So my game plan.

• Support LA and other online companies.
• Price with Amazon first, BRS second. So if someone starts an Amazon storefront, I’m in
• I am going to spend more time finding LFS for my dry goods.

Just my thoughts.

 

[FishyFishFish]

So you're going to shop at Amazon to stick it to BRS

 

[Cell]

Nobody knows how much or little control Bertram Capital has the future of BRS. They were likely brought in to enable BRS to acquire MD.

To those who hated this move, who would you have rather had Marine Depot be sold to? It was going to be sold to someone.

 

[mike550]

So you're going to shop at Amazon to stick it to BRS

Guessing your reply is to my post. Yep. Amazon still has smaller vendors that use them for storefronts and I’ve never had issues (like returns etc) with Amazon Prime. Fwiw I do buy a lot of my gear from AMZN where I get same or better pricing, free 2 day shipping, and no hassle returns.

I‘m also willing to pay more to a LFS.

 

[FishyFishFish]

Guessing your reply is to my post. Yep. Amazon still has smaller vendors that use them for storefronts and I’ve never had issues (like returns etc) with Amazon Prime. Fwiw I do buy a lot of my gear from AMZN where I get same or better pricing, free 2 day shipping, and no hassle returns.

I‘m also willing to pay more to a LFS.

Have you seen some of the recent listings on BRS, selling drop-shipped items from other, smaller, companies?

Whilst I admit that Amazon does have some benefit to small retailers, they don't do it out of the goodness of their heart and they take a sizeable cut for the privilege.

I haven't had any issues with BRS returns either, so that wouldn't be a factor for me as to where I shop. I can understand the preference to support smaller retailers and the LFS, but if it's the choice between Amazon or a dedicated aquarium store then I will always support the latter (assuming reasonable price parity). If BRS is sold to the wolves in the future then that might change, but we're nowhere near that yet IMO.

 

[mike550]

Have you seen some of the recent listings on BRS, selling drop-shipped items from other, smaller, companies?

Whilst I admit that Amazon does have some benefit to small retailers, they don't do it out of the goodness of their heart and they take a sizeable cut for the privilege.

I haven't had any issues with BRS returns either, so that wouldn't be a factor for me as to where I shop. I can understand the preference to support smaller retailers and the LFS, but if it's the choice between Amazon or a dedicated aquarium store then I will always support the latter (assuming reasonable price parity). If BRS is sold to the wolves in the future then that might change, but we're nowhere near that yet IMO.

My preference for AMZN is partly their return policy. Please correct me if I’m wrong but BRS charges (or you pay) for return shipping whereas Amazon doesn’t. I also agree that Amazon still takes a profit on smaller businesses but I’m okay with that.

Another thought for you. If you like Amazon and Apple you can buy their stock then your purchases help raise their revenue and increase the stock price. Haha

 

[mike550]

Nobody knows how much or little control Bertram Capital has the future of BRS. They were likely brought in to enable BRS to acquire MD.

To those who hated this move, who would you have rather had Marine Depot be sold to? It was going to be sold to someone.

Just a guess but Bertram probably has a majority stake or at least control over BRS. Why would they want to be a minority investor without control?

 

[Anchor]

If I take all of what everyone has said.. I get this thought.. The PE bought majority of BRS, which I dont see, to Buy MD so that BRS could be sold off in the future.. Is it possible BRS just took a loan from the PE? My understanding is not all holding companies are the same.. Essentially Ryan and co., did this to go out of business in the not too distant future.. ?? Planned obsolescence...

 

[BiggestE222]

Hostile takeover? You watch too much TV. You also have no clue what leverage was used in the sale if there was any at all because it's all kept private.

Well MD came to BRS. That is BRS’ story

 

[rtparty]

Just a guess but Bertram probably has a majority stake or at least control over BRS. Why would they want to be a minority investor without control?

Bertram doesn't have majority and doesn't control anything at BRS...at least that's what my sources tell me