PADI has been sold to another investment group. Thoughts?

[seriousdiver]

With PADI already the top agency, I wonder how they plan to expand it? It's already known world wide.

Expand? They're going to drive PADI into the ground, Wall Street nowadays has no goal of making companies successful, only of sucking the lifeblood out of them.


Greed and Debt: The True Story of Mitt Romney and Bain Capital | Politics News | Rolling Stone

I'll have to look into Lincolnshire Management, hopefully they're not "as" bad as the other "Private equity" firms out there.I'm highly skeptical whenever it comes to buyouts/consolidations/hostile takeovers, it inevitably only hurts customers by leading to higher prices.

I know this isn't exactly a merger, but it smells like a consolidation of fitness companies and mergers/acquisitions are usually brutal and not all fun and games.

Why mergers fail - CBS News

If PADI somehow remains unscathed from being bought out I'll be shocked

The customers almost always lose in acquisitions like this.

 

[Quero]

It wasn't a hostile takeover. Nor was it a merger.

 

[seriousdiver]

It wasn't a hostile takeover. Nor was it a merger.

If you read either of the links I provided it doesn't need to be a hostile takeover or merger in order to be bad for customers.

PE firms are like making a deal with the devil, it might be handshakes and smiles but it will screw consumers over in the long run.

 

[Peter Guy]

I get the PADI bashing and I get the "capitalist" bashing -- what I don't get is that somehow people think that that ONLY a "for profit" corporation like PADI is interested in making money. PADI is a primarily a publishing company, but is that really any different from the other "major" agencies? NAUI doesn't give its materials to the instructor (shop) who sells it to the student, does it? TDI doesn't give its materials away either, does it? (If they both do then I got robbed when I had to pay for them!)

And, of course, PADI doesn't teach anybody to scuba dive -- it is "we the instructors" who do the actual teaching AND charge the students. Me, I sort of wish that PADI would significantly increase its marketing/advertising here in the USofA which just might encourage more people to come to me to teach them how to dive. That PADI would get a boost is just fine by me.

 

[rhwestfall]

when I read Diver0001's essay, all I could think of is the merger of SP & PADI into some horrific monopolistic money grabbing conglomerate... BTW - was the investment group Johnson Outdoors???????

 

[Quero]

If you read either of the links I provided it doesn't need to be a hostile takeover or merger in order to be bad for customers.

PE firms are like making a deal with the devil, it might be handshakes and smiles but it will screw consumers over in the long run.

That's a very unequivocal claim, and like most statements that express a starkly polar point of view, it's long on hyperbole. The vast majority of companies acquired by PE firms are sold quite willingly and happily by their owners, and consumers are not affected in any way they would notice. The PE I have shares in has invested in an educational institution, retail and wholesale food companies, a chain of newstands, a car rental company, and lots of other businesses that provide products and services to the public. They didn't end up bidding for PADI, but they considered it. It's just not true that PEs are evil and that all PE deals are bad for consumers.

 

[djcheburashka]

I don't think this is a big deal. It sounds like the PE fund had been looking for a place to deploy its capital for a long time, so they may have been willing to accept a low rate of return (if the other choice was giving the cash back to investors).

PADI has never struck me as a well-run company. They're difficult to reach, the online services are like something you would have seen fifteen years ago, the operating structure is opaque, they've failed to compete effectively in the technical space, and a lot of their product (ie, written materials) look like something you'd distribute to fifth graders.

As for whether PE means the company will be "stripped dry" or whatever, thats a misperception. There are many, many PE funds, and they pursue a host of different strategies both for identifying targets, and for harvesting profits. Sometimes the goal is to find assets not reflected on a company's balance sheet and monetize them; sometimes it's to make operations more efficient and then sell to the public; sometimes the fund perceives that the public markets are illiquid and underpricing the company, so they want to buy and hold until liquidity returns.

(As for padi's size, I'd be shocked if they don't have $50 mil in revenues. If there are 10,000 dive shops, that's 5000 per dive shop per year, including padi's share of the insurance money, etc. it's not a lot of revenue in the scheme of things.)

In this case, it seems that the owners of PADI were shopping it around, trying to sell it and cash out, for quite some time.

 

[Thalassamania]

when I read Diver0001's essay, all I could think of is the merger of SP & PADI into some horrific monopolistic money grabbing conglomerate... BTW - was the investment group Johnson Outdoors???????

SP did it before with NASDS, but that was before they were acquired by Johnson and Johnson, it ended badly, but size might make a difference.

...
(As for padi's size, I'd be shocked if they don't have $50 mil in revenues. If there are 10,000 dive shops, that's 5000 per dive shop per year, including padi's share of the insurance money, etc. it's not a lot of revenue in the scheme of things.)

In this case, it seems that the owners of PADI were shopping it around, trying to sell it and cash out, for quite some time.

I suspect that 50 million is a low figure after you figure in the insurance arrangement and what-not.

 

[ElGaucho]

NAUI doesn't give its materials to the instructor (shop) who sells it to the student, does it? TDI doesn't give its materials away either, does it? (If they both do then I got robbed when I had to pay for them!)

True, but most of them don´t force some absurd materials like those horrible videos on the instructor and hence the students. I think it would all be nice and dandy if the materials existed but you could choose wether to use it. Also, in many agencies (think TDI) using materials, or even slides is encouraged but not mandatory for my understanding.

And, of course, PADI doesn't teach anybody to scuba dive -- it is "we the instructors" who do the actual teaching AND charge the students. Me, I sort of wish that PADI would significantly increase its marketing/advertising here in the USofA which just might encourage more people to come to me to teach them how to dive. That PADI would get a boost is just fine by me.

I agree. PADI needs to make scuba diving more fashionable. It needs to be cooler, hip, adventurous. I shoot commercials for a living, and I´ll be damned if it can´t be done. PADI and their videos, and their promotional materials in general make scuba less exciting than golf. Come on, if Nike can make golf cool, why can´t PADI hire an ad agency and shoot stuff that makes you want to go diving. It´s PATHETIC. All the video material (educational or promotional) is produced like a crappy infomercial for diving.

I just shot a spot for an internet company, they do basically hosting and cloud services. It´s a mexican company, so no multi-million dollar enterprise here. Can´t PADI make something like that to make diving cool and interesting? I will upload a video of what I did when it´s finished, so you can judge if better things can´t be done for diving.

Oh well ...

 

[Paulmal]

I agree. PADI needs to make scuba diving more fashionable. It needs to be cooler, hip, adventurous. I shoot commercials for a living, and I´ll be damned if it can´t be done. PADI and their videos, and their promotional materials in general make scuba less exciting than golf. Come on, if Nike can make golf cool, why can´t PADI hire an ad agency and shoot stuff that makes you want to go diving. It´s PATHETIC. All the video material (educational or promotional) is produced like a crappy infomercial for diving.

I find this offensive to infomercials, the videos look like they are home videos, I have watched a couple and they really suck. I agree more people would watch them for more courses if they made you excited about the topic. I stopped watching padi video after my OW course I realized they were USELESS, as my instructor was much better at covering the material.