Jotul business & investment groups

[mar13]

(broken link removed)

I found the above article on interesting. It ends with mentioning how an investment group based in Los Angeles has bought Jotul...

 

[begreen]

This is an interesting article. Thanks for posting. I moved it to the main hearth forum. It's definitely hearth related. Sounds like Jotul US will be expanding soon, possibly with a fireplace addition?

 

[mar13]

I found theJotul history interesting.

The article also shows one more example of there being so much money in these "global private-equity firms" searching for potential investments, such that the stove world is now included. Hopefully they reinvest the earnings back into the industry. Wishful thinking would be that they provide needed capital where it can be helpful, perhaps more testing to help explore the engineers' ideas for adapting to evolving EPA regulations and tax incentives.

 

[joefrompa]

Jotul's ownership by PE means they will aggressively seek to grow sales and profit in a way they obviously never had to do before.

It rarely means they increase spend on quality or innovation initiatives, but it MAY mean they increase spend on new product(s) better dialed in to growing market trends.

 

[Bad LP]

Wonder if they will pull out of Gorham Maine and move to a more friendly business state.

I don't trust these equity companies to do the right thing. They answer to the shareholder at all times, every time.

 

[begreen]

Jotul's ownership by PE means they will aggressively seek to grow sales and profit in a way they obviously never had to do before.

??? AFIAK there is no relationship between Jotul and PE. Jotul is owned by OpenGate. PE is still privately held I believe.

 

[begreen]

I don't trust these equity companies to do the right thing. They answer to the shareholder at all times, every time.

Not always. Sometimes they help streamline manufacturing and provide resources the stove company didn't have on its own. Decisive Dividend bought Blaze King 6 yrs ago and that appears to have worked out.

 

[mar13]

??? AFIAK there is no relationship between Jotul and PE. Jotul is owned by OpenGate. PE is still privately held I believe.

I wondered the same thing, then I realized PE=private equity

 

[begreen]

Bad choice of acronym in this case and me sleepily reading before coffee.

 

[mar13]

I think it was naive of me to think that private-equity firms were not already playing large role in the hearth industry. I didn't know about Blaze King. I thought I had heard something about Vermont Castings, so quickly googled,and found the following 7 year old article ( https://vtdigger.org/2014/10/02/iowa-firm-buys-vermont-castings/ ) showing they had been bounced around and being owned by a private equity firm during at least one point of their history.

 

[begreen]

Yes, poor VC has a checkered past with ownership. At one point it was owned by a clueless teacher's investment fund. The HNI acquisition provided a needed improvement in funding, resources and improved manufacturing efficiencies.

 

[Bad LP]

Not always. Sometimes they help streamline manufacturing and provide resources the stove company didn't have on its own. Decisive Dividend bought Blaze King 6 yrs ago and that appears to have worked out.

I'm rather confident that any equity firm is going to **** and pillage as needed for their own benefit. I was in a stove shop last Friday and the owner who I've done a fair amount of business with was saying stock was low in part to Covid but also they sell everything they get their hands on.
Sure it's in a very well off part of the state north of Boston and just south of the NH line but there's no stock and there hasn't been.
I was there exploring my options and costs for a gas stove and required clearances and venting before I settle on a direction of Runtal BB, panel radiators or refurbing a CI radiator.

 

[begreen]

We'll see. There are some private equity firms that are in it for the longer haul. Not every one is run by Gordon Gekko.

 

[joefrompa]

I work for a company that is PE owned by major firms and has been for many years

It's....intense. And it's all about growth - growth at the top and bottom line.

But what it isn't about is disappointing customers or ripping out the base of the business.

 

[begreen]

I work for a company that is PE owned by major firms and has been for many years

It's....intense. And it's all about growth - growth at the top and bottom line.

But what it isn't about is disappointing customers or ripping out the base of the business.

This is the same for corporate America. It's not uncommon in the software industry to see the customer shift from the professionals they serve to the shareholders.

 

[woodhtr]

I work for a company that is PE owned by major firms and has been for many years

It's....intense. And it's all about growth - growth at the top and bottom line.

But what it isn't about is disappointing customers or ripping out the base of the business.

I'm always impressed with the knowledge and worldliness of posters on these forums. Members here seem to be more from professionals and DIYer types rather than backwoodsman.

I'm skeptical of the advantage of private equity... what do they bring to the table? Just money really. And if the business just needed money to grow, it should be able to secure a low interest loan in the current lending environment. I'm more of the opinion that private equity buyout is just a way for the current owners to cash out.

Maybe the new owners can bring more clout for lobbying, maybe to get more of the Jotul products to qualify for federal tax incentives.