BRS and Neptune Merger

[InactiveAcct]

I think it’s a disaster for BRS. My biggest gripe with them has been how they push Neptune products like this - then you dig into the most recent review, or Neptune customer service tales (“pay to send it back to us so we can fix it. Oh we can’t fix it but here’s $20 off a new one”) and realize you don’t want any part of it.

 

[Fishy Jacket]

As said in a couple of posts earlier, MD is a horizontal acquisition and this is vertical. Oversimplified, but there are two types of vertical...raw material to manufacturing and manufacturing to distribution. This is the second one and quite frankly the hardest one to pull off successfully. In this type of play, there is no way all involved have the same motivations/objectives or even sufficient skills to cross over to the other part.

BTW, this is not the same as "store brand" as Apex/Neptune should be in the premium margin space (not to be confused with judgement of good or bad quality). If it slips to store brand perception, good luck selling enough quantity to cover margin hit.

Where will this go? Hard to say, however we will all find out together!

 

[jkcoon]

As said in a couple of posts earlier, MD is a horizontal acquisition and this is vertical. Oversimplified, but there are two types of vertical...raw material to manufacturing and manufacturing to distribution. This is the second one and quite frankly the hardest one to pull off successfully. In this type of play, there is no way all involved have the same motivations/objectives or even sufficient skills to cross over to the other part.

BTW, this is not the same as "store brand" as Apex/Neptune should be in the premium margin space (not to be confused with judgement of good or bad quality). If it slips to store brand perception, good luck selling enough quantity to cover margin hit.

Where will this go? Hard to say, however we will all find out together!

Agree.... I don't see any strong synergies here; probably would have been better to simply take a large silent investment in Neptune versus publicly tying them together. I feel this only serves to promote alternate products at BRS' competitors and ultimately isolates Neptune's distribution base. Furthermore, Neptune's quality issues could prove to be quite the stain on BRS's, largely, excellent reputation... can't say I'm excited about this.

 

[Cell]

It feels like some people think companies like MD and Neptune are much larger entities than they really are. Neptune has so much more R&D money now than it did last week.

And BRS isnt going to stop selling competitor systems like Hydros because they still make a profit off of the sales and would lose that profit to customers that dont want Neptune.

 

[harper]

Wait and see. Most the online vendors are competitive. I would probably buy most things through BRS (or LFS) as their videos have provided value to me. I figure BRS has saved me money. I like to try out new stuff. BRS videos are thorough enough that I can skip some of the stuff that won't work out to my fancy.

Been ordering through mags or online probably since before Ryan was born. Think the first was a place in Indiana, Delco or something like that. Ordered from most the usual online suspects. None of them (until recently) have offered the added value of explaining the product and seeming to care that hobbyists are successful like BRS has done. Recently BRS has been out of stock on several items I needed. So small order from them for their bulk items and premium for retail items. I used Marine Depot for items which BRS didn't carry.

I'm not excited about Neptune, but can see potential. Aquarium controllers just isn't a robust business. Neptune has done well just to still be in business. I've had tens of different controllers mostly ATOs but some ORP and pH. Going on 10 years with a reef angel controller, got 10 yr out of a couple of Tunzes and Rocon Level Masters. But eventually all the electronics fail from corrosion/salt spray. I hope Neptune updates to a water resistant head unit. I recently went with Hydros primarily due to water resistance, and poor reviews of Neptunes ATO solution. And I have seen my LFS push the Neptune stuff but can't keep theirs running. Like the stuff just seems to fall apart. Grant it there is water dripping/splashing on it regardless where they mount it, which could be better managed at a home.

The Hydros add-ons appear to be low quality mass-produced items but they're priced a lot cheaper than the Neptune add-ons which don't seem to be any higher quality. Maybe the merger will help volume so Neptune can provide a better quality/value proposition.

Hope BRS is able to execute on their integrated vision. It would be an amazing feat.

 

[SD_Reefer_Madness]

I agree with you 100%. I shifted my business to Saltwater Aquarium.com. I don't want to give all my money to a predatory investment bank.

Where do you think they got the loan to start their business?

 

[Silvas]

Ever here if a little company called Microsoft that nearly got shut down in the late 90’s early 2000’s for being considered a monopoly? When there only crime was not having any competition? Yea trust me it happens. Cost my dad his entire retirement having been a 35 year employee of Microsoft

I don’t understand. Why did your Dad loose his retirement? They split Microsoft into smaller companies no?

@dyno no, they did not split MS up. It was one of the things being bandied about as a possibility though.

@Rscott laying it on a bit thick there, aren't you? MS was *never* in danger of being shut down over that fiasco. It simply wouldn't have happened in any possible outcome. The government and military both are, and back then were even more, heavily dependent on Windows and other MS products. And no, simply not having any competition was not their "only" crime, in fact it wasn't a crime at all. The whole antitrust thing was 90% over the browser anyways edit: edit: I shouldn't say it was 90% about the browser, it was 90% spurred on by and driven by the browser lawsuit and claims of antitrust stemming from that. Their crime was their anticompetitive practices - giving steep kickbacks to OEMs like dell not just for volume of OS licenses they bought, but to have no less than 90% of their product line be windows machines that you simply didn't get a choice of linux or other OS or no OS at all. While that may be clothed as a discount or reward, it essentially (in a highly competitive, relatively low margin space like PCs) becomes a penalty if you don't offer nearly exclusively windows boxes.

Also (and this one I very much disagreed with) the whole preloading IE onto the desktop with windows. The argument being that by loading IE on the desktop, and integrating it into the OS, you're essentially giving IE a large advantage in terms of what browser people are going to use - it's already there, why go get another?
But here's the rub - if you don't have a web browser on your computer, how are you supposed to go online and get a web browser? You can't go to netscape's website to download netscape, you don't have a web browser. Yes, you could go to a command prompt and use the built in command line FTP utility, and go download netscape or whatever other browser you could find, but that wasn't a task for novices. If you weren't familiar with the command line, and how FTP worked, and reading directory listings, etc. you were in for a hard time.
I always viewed it as preloading IE onto desktops was doing people a favor - there was nothing to stop people from using IE to go download netscape or opera or whatever other browser their heart desired, and having IE already there just made it easier to do. But, I was looking at it from a common sense point of view, rather than a intricate legal issue and there may have been other facts, like paying OEMs to not preload netscape, that would have made it anticompetitive, that I'm unaware of.

Comparing BRS acquiring *one* other company that was a direct competitor, out of at least several, and then *one* manufacturer (which wasn't a competitor at all, and is vertical integration) to MS antitrust is ridiculous. They're not even in the same ballpark.

 

[innovusaquaculture]

Now they need a testing, medication, dosing, etc company.... Red Sea? Too much? It might be the perfect fit...

Remember these deals most likely aren't put together in a month or two. They have been in the works for months and are being carefully laid out for us (and the new investors coming in) and the eventual IPO.

 

[theishkid]

It has been amazing to read this thread and see all the misinformation and hatred towards these two companies and I just don't get it. For me, Marine Depot was awesome in the early 2000's when I had my first tank but they were dwindled down to basically a forgotten about store by 2020 unless they happened to sell a random product that BRS or SWA didn't have. The owner was trying to get out and ask for someone to buy them and for whatever reason BRS did. Maybe it was for some of the talent... maybe it was for west coast warehouse space... either way, other than nostalgia reasons it's not a big deal and it's not a monopoly.
There are hundreds of LFS all over the country. There are dozens of reputable online retailers. There's Amazon, Chewy (which I just used the first time to buy a heater that nobody else sells), or even buying direct from the company of the product you want. This isn't AT&T merging with Verizon... that's a monopoly.

I'm also so confused by everyone being upset about BRS trying to promote items to sell... How dare they try to make a profit! I've got so much knowledge and know-how off of these guys in the last 7 years it's unreal. Why are they not allowed to push and promote products that they sell while also offering investigate or comparison videos? What kind of logic is that? Of course they are going to show you products and steer you into ones they make a bigger profit on.

And all the Neptune haters out there... I just don't get it. Do their products work flawlessly... of course not. Does their PMUP 2 suck... of course it does. But I just don't understand all the hatred for this company. I've had an Apex for the last 5 years and needed support twice. In both occasions I was helped within a couple of days and had my problem solved or replaced. I'm curious how much of the complaining comes from people who need service or support on an out of warranty product and because you didn't get a full replacement Neptune sucks? I think some of you need to lower your expectations on what their equipment does. You spend $800 dollars on something that monitors multiple parameters of the tank, can control and automate tasks that make reefing so much easier and less time consuming than it was 20 years ago, and you get upset when the $100 salinity probe isn't lab grade stable. $800 bucks is a ton of money but the value for what I have got out of it has been great. A few hiccups here and there and a bit of a learning curve but overall it's a fantastic system for not a lot of money when you think about it. It cost $500 dollars just for a decent PAR meter.

And for all the people with the BRS buying reef2reef... the joke has been said about 15 times already in the thread. And yes for the right amount of money I'm sure the owner would sell it to BRS or any other company. There are very few things in this world that don't have a price tag on it and you shouldn't be shocked if that should happen someday.

 

[vangvace]

My initial thoughts on this one.
With the backing of BRS, Neptune now can produce more gears that they can't afford before.
Hopefully Mini DOS, of course Trident 2.0.
TDS meters,

I do wonder how BRS will market the other controllers.

The same way they do now, out the side of their mouth in a hushed voice while upselling the Apex.

So Bertram capital makes an investment in BRS in February. Then with this new investment BRS / Bertram acquire Marine Depot in June. Now they take over Neptune about a month later. That’s a lot to acquire and integrate. I hope it goes well for everyone involved — especially the Bertram investors.

Betram will get their money. If BRS Inc remains after is a different story.

Maybe they can help Neptune fix their quality issues.

Depends... tighten specs on their electronics? Sure. Paying extra for cleaner soldering and water coating? Sure. Design flaws... ehhhh

My initial reaction is, awesome! BRS now has a manufacturer to do more R&D to products Ryan and Randy have discussed in their live streams. Who doesn’t want to see a Neptune protein skimmer with built CO2 scrubbing abilities and DC controlled? In my eyes I hope to see more innovation in the industry.

BRS now also has additional costs as well for additional server administration and will have to make the determination on if they should change Neptune customer support going forward. ie something different than a $20 coupon.

I am not a fan of this merge, BRS will lose objectivity to review Neptune products.

BRS never has had objectivity of Neptune products imo.

Do you have an alternative controller that has the same functionality? ( I ask because I may be in the market one day soon)

For a controller? GHL. For return pumps? Plenty of vendors. For circulation pumps or ATOs? Anything but Neptune.

IMO good, bad or otherwise there isn't another domestically produced aquarium controller on the market currently that is a direct competitor to the Apex. The hydros may get there one day, but it's not currently. After that there's nothing... GHL is overseas and is directly comparable but it's overseas and you'll never get the distribution and domestic support you will with domestically produced items like that. As far as their merger goes I'm pretty much indifferent.

Domestically labeled and marketed, but not produced.

Ecotech is the clear vertical to me, but I'd bet the pricing wouldn't be attractive to anyone that could be enticed by the MD/Neptune deals.

Any deal for a controller is a head scratcher to be when almost all controllable hardware comes with an app now.

An interesting mixed move might be to buy Coralvue somehow depending the diligence.


I'm kinda hoping BRS was the Live Aquaria buyer but I would have thought it would be evident at this point

Coralvue would have been interesting with the breadth of equipment that comes with it. It would shorten some supply chain hops for some of their bigger items and provide a larger logistical boost.

Maybe they will refocus Neptune to their core product and get away from lights/power heads and back to monitoring and control.

improved customer service might be the biggest benefit to us Neptune users

Neptune needed to pump out new products to continue to generate revenue and they cut hardware corners that would require a systematic refresh.

 

[Silvas]

It has been amazing to read this thread and see all the misinformation and hatred towards these two companies and I just don't get it. For me, Marine Depot was awesome in the early 2000's when I had my first tank but they were dwindled down to basically a forgotten about store by 2020 unless they happened to sell a random product that BRS or SWA didn't have. The owner was trying to get out and ask for someone to buy them and for whatever reason BRS did. Maybe it was for some of the talent... maybe it was for west coast warehouse space... either way, other than nostalgia reasons it's not a big deal and it's not a monopoly.
There are hundreds of LFS all over the country. There are dozens of reputable online retailers. There's Amazon, Chewy (which I just used the first time to buy a heater that nobody else sells), or even buying direct from the company of the product you want. This isn't AT&T merging with Verizon... that's a monopoly.

I'm also so confused by everyone being upset about BRS trying to promote items to sell... How dare they try to make a profit! I've got so much knowledge and know-how off of these guys in the last 7 years it's unreal. Why are they not allowed to push and promote products that they sell while also offering investigate or comparison videos? What kind of logic is that? Of course they are going to show you products and steer you into ones they make a bigger profit on.

And all the Neptune haters out there... I just don't get it. Do their products work flawlessly... of course not. Does their PMUP 2 suck... of course it does. But I just don't understand all the hatred for this company. I've had an Apex for the last 5 years and needed support twice. In both occasions I was helped within a couple of days and had my problem solved or replaced. I'm curious how much of the complaining comes from people who need service or support on an out of warranty product and because you didn't get a full replacement Neptune sucks? I think some of you need to lower your expectations on what their equipment does. You spend $800 dollars on something that monitors multiple parameters of the tank, can control and automate tasks that make reefing so much easier and less time consuming than it was 20 years ago, and you get upset when the $100 salinity probe isn't lab grade stable. $800 bucks is a ton of money but the value for what I have got out of it has been great. A few hiccups here and there and a bit of a learning curve but overall it's a fantastic system for not a lot of money when you think about it. It cost $500 dollars just a decent PAR meter.

And for all the people with the BRS buying reef2reef... the joke has been said about 15 times already in the thread. And yes for the right amount of money I'm sure the owner would sell it to BRS or any other company. There are very few things in this world that don't have a price tag on it and you shouldn't be shocked if that should happen someday.

Well said. The one point I would partially disagree with is the promoting products bit. I think it's a fair bit more nuanced than that. I don't have a problem with them promoting products at all, but there are better and worse ways of doing it... and there's also perception and the timing of when you do things that makes a huge difference.
I'm relatively new to the hobby, haven't even got my first tank up yet (still working on getting my stand), but have been following and researching for the last few years. I can see where there's a bad perception here. I've seen hundreds of videos from BRS doing really informative stuff, and what looked to be honest unbiased comparisons and reviews of gear, for a long time. That can set that expectation that, even though the gear may not be the most expensive or the highest margin, they're willing to say it's the best if it is - even if it means making less profit.

But then over time even I noticed that there does appear to be a bit of a slant toward neptune and some other high $$ gear. Now maybe it's not intended, but I can see where some could have the perception that they went out and built themselves up a rep as an honest unbiased source of information that wasn't willing to bias push lower quality or inferior equipment just to maximize profit, then used that rep to facilitate pushing higher $$ gear even if it wasn't that great.

Personally, I have a seneye reef monitor and that's what I'll be using for the time being once my tank is up. Can it monitor as much as an apex or hydros or profilux? no, but it can monitor enough. I'm probably not in the game for a controller until someone puts out a controller with an open, published API so that any equipment manufacturer can make their gear able to be controlled by it; or 3rd parties can make plugins or bridges that will allow a particular piece of equipment able to be controlled by it. If that ever happens, then gear manufacturers who make the most effort to make their gear compatible, or start publishing their own open APIs to control their gear so that connector plugins can be made to bridge the 2, will get my business.

I'm firmly of the opinion they should all be making an effort to work toward something like an industry standard for interfacing and controlling. Compete on price, quality, features, and service rather than relying on vendor lock in - only these couple lights fully work with this controller, and those pumps only work with that vendor's closed control system, etc. vendor lock in sucks.

 

[theishkid]

But then over time even I noticed that there does appear to be a bit of a slant toward neptune and some other high $$ gear. Now maybe it's not intended, but I can see where some could have the perception that they went out and built themselves up a rep as an honest unbiased source of information that wasn't willing to bias push lower quality or inferior equipment just to maximize profit, then used that rep to facilitate pushing higher $$ gear even if it wasn't that great.

I wonder if that has to do with Neptune actually listening to BRS and what they perceive the needs of hobbyist are? That's one thing I really thought was interesting in that video. Neptune and Sicce seem to be brands that would take Ryan's calls and collaborate on feedback... But Ryan implied he was somewhat shocked at the other brands that don't seem to care that they are the largest dealer and don't care about the feedback from BRS or their customers.

 

[vangvace]

I wonder if that has to do with Neptune actually listening to BRS and what they perceive the needs of hobbyist are? That's one thing I really thought was interesting in that video. Neptune and Sicce seem to be brands that would take Ryan's calls and collaborate on feedback... But Ryan implied he was somewhat shocked at the other brands that don't seem to care that they are the largest dealer and don't care about the feedback from BRS or their customers.

For Neptune it was Terrance's aggressive marketing and eventual friendship with Ryan.

 

[dyno]

It has been amazing to read this thread and see all the misinformation and hatred towards these two companies and I just don't get it. For me, Marine Depot was awesome in the early 2000's when I had my first tank but they were dwindled down to basically a forgotten about store by 2020 unless they happened to sell a random product that BRS or SWA didn't have. The owner was trying to get out and ask for someone to buy them and for whatever reason BRS did. Maybe it was for some of the talent... maybe it was for west coast warehouse space... either way, other than nostalgia reasons it's not a big deal and it's not a monopoly.
There are hundreds of LFS all over the country. There are dozens of reputable online retailers. There's Amazon, Chewy (which I just used the first time to buy a heater that nobody else sells), or even buying direct from the company of the product you want. This isn't AT&T merging with Verizon... that's a monopoly.

I'm also so confused by everyone being upset about BRS trying to promote items to sell... How dare they try to make a profit! I've got so much knowledge and know-how off of these guys in the last 7 years it's unreal. Why are they not allowed to push and promote products that they sell while also offering investigate or comparison videos? What kind of logic is that? Of course they are going to show you products and steer you into ones they make a bigger profit on.

And all the Neptune haters out there... I just don't get it. Do their products work flawlessly... of course not. Does their PMUP 2 suck... of course it does. But I just don't understand all the hatred for this company. I've had an Apex for the last 5 years and needed support twice. In both occasions I was helped within a couple of days and had my problem solved or replaced. I'm curious how much of the complaining comes from people who need service or support on an out of warranty product and because you didn't get a full replacement Neptune sucks? I think some of you need to lower your expectations on what their equipment does. You spend $800 dollars on something that monitors multiple parameters of the tank, can control and automate tasks that make reefing so much easier and less time consuming than it was 20 years ago, and you get upset when the $100 salinity probe isn't lab grade stable. $800 bucks is a ton of money but the value for what I have got out of it has been great. A few hiccups here and there and a bit of a learning curve but overall it's a fantastic system for not a lot of money when you think about it. It cost $500 dollars just for a decent PAR meter.

And for all the people with the BRS buying reef2reef... the joke has been said about 15 times already in the thread. And yes for the right amount of money I'm sure the owner would sell it to BRS or any other company. There are very few things in this world that don't have a price tag on it and you shouldn't be shocked if that should happen someday.

@theishkid. Unfortunately Haters' will hate.

 

[Silvas]

I wonder if that has to do with Neptune actually listening to BRS and what they perceive the needs of hobbyist are? That's one thing I really thought was interesting in that video. Neptune and Sicce seem to be brands that would take Ryan's calls and collaborate on feedback... But Ryan implied he was somewhat shocked at the other brands that don't seem to care that they are the largest dealer and don't care about the feedback from BRS or their customers.

It probably does have at least a bit to do with that; unfortunately for all of us, this is still a very niche hobby and in those, you really don't have to have high volume to make a boatload of money, because options are limited, so there does seem to be a fair number of manufacturers out there who simply don't care what the customers want - it's the old, they'll buy what we offer them because they need it, or because it fills part of their need; or they'll buy it because we tell them they want it mentality.

I honestly wish I had the capital and more electronics based, like electronics engineering, and coding skills... because I'd have no problem starting up a new company to address some of the deficiencies I see in the hobby. A controller with an open API; lighting that can be fully controlled from a controller (probably using the same open API as the controller, so it would work with that and also allow others to build controllers that would work with it); the same for wave and return pump controllers - being able to control not just on/off, but flow rate, modes, feeding or maintenance pauses, and even skimmers; maybe even motorized and controllable gate or ball valves - so you can adjust and control your plumbing and flow through various reactors or other gear.
As it is, I have lots of ideas, and even understanding of how to build some of the hardware, but I have zero coding skills. I'm an IT guy by trade, but my experience mostly leans toward the hardware side of things, and software only on the support side.

 

[damselindistress]

In my business experience which involved a lot of buyout/ mergers I have found that:
1. These don't happen because they fell in love with each other. Either Neptune ownership wanted a cash out or (more likely) they were in trouble financially so were an attractive merger target.
2. They often do not work out for everyone in that there was a reason Neptune wanted (needed) to do this and larger often comes with an attitude.
3. Companies like Bertram are not patient in wanting an ROI.
4. With MAP pricing so prevalent with most major brands, will BRS keep it for Neptune products and does it make sense to acquire them unless they don't?
5. Often customers will shift business to vendors like SW.com or Premium.
6. As others have mentioned, one of BRS's unquantifiable assets was it's supposed unbiased product videos. Obviously any opinions expressed involving Neptune products or those that compete with them will be suspect.
7. Whatever they tell you the customer centric reasons are for this are just not true. There is only one reason.......more profit and ROI for Bertram. It's just like when a company comes out with a new employee benefits plan. They tell you that it is better for the employees when in actuality it is always about cutting expenses and moving more money to the bottom line.

#FACTS....25 yr banker here and have been on both sides, the acquirer and the acquired....all smiles and love fest in press announcements...guarantee not as warm and friendly behind the scenes. Uncertainty and speculation abounds in mergers, you put on a smile for the customer but it can get brutal as the pieces fall into place and the new order of things take shape. Best of luck to all parties involved, hope it results in some bang up opportunities for us as consumers.

 

[damselindistress]

Wow people feeling some kind of way about this ;Wideyed...

 

[laverda]

Maybe they will refocus Neptune to their core product and get away from lights/power heads and back to monitoring and control.

improved customer service might be the biggest benefit to us Neptune users

Like you I feel they need to concentrate on making the Apex more robust and reliable. All the accessories have pretty much proven to be low quality items sold at a premium. Sadly it is unlikely as Ryan was talking about a Neptune skimmer in the video. Clearly they have been in bed together a long time. Valid negative reviews of Neptune products have been removed for a long time.

 

[joe0813]

well I was going to go through the thread and read but I really dont want to read 11 pages.... im assuming its a bunch of people trashing on BRS though

 

[ThRoewer]

People are spending $800.00+ to light 2x2 spaces, and they're spending it on inferior products. You can slap your name on anything and sell it these days. The SKY is a much cheaper, in materials, light than the Phillips Coral Care that was actually created by a lighting engineer for a company that will have first dibs on diodes. That means better chromaticity consistency and stability(glass diffuser) than everyone else and the warranty reflects the quality of the product. You'd be a fool not to get in on that type of customer base.

Phillips is a company that knows light and light fixtures, domestic, public, commercial, likely even military. They have been doing that for decades and are one of the world leaders in the lighting industry and know what they are doing. So I would trust their products over something made by Neptune any day, and especially after experiencing how sloppy and cheaply the Neptune products are tested and build.