BRS and Neptune Merger

[Braver69]

I dont like this news, as a company grows the more it changes into something that is a shadow of it's former self.

 

[tricky_tran]

hmmm. when will BRS acquire reef2reef?

 

[Sleepydoc]

They already favor certain brands, including Neptune. Not saying that's bad or otherwise.

I still remember a few years ago when they were gushing about the Vertex Cerebra, repeating Vertex’s selling points, despite the fact that they were clearly false.

What's curious is that BRS just started carrying GHL Profilux and Coral Vue Hydros this year. Hydros somewhat understandable as it just came out, but Profilux has been a proven reliable controller for many years.

Will be interesting to see if those products remain on BRS.

Yeah, I was wondering that, too. I hope they don’t stop carrying the other controllers.

I have an Apex system that’s generally been working fine for me, but I feel like Neptune has completely stopped working on the apex. Apex has a long history as an aquarium controller, but they’ve rested on their laurels and in the face of some newer competition they’ve started falling behind, IMO, and even basic software upgrades aren’t happening. Seriously hoping that BRS will invest a bit in them.

 

[Sleepydoc]

I was stunned to see that my LFS has substantially cheaper prices on some dry goods.

I live in Minneapolis, so BRS is local to me, but my LFS often has products (even BRS products) for the same price so I patronize them whenever I can

 

[scolson]

This isn't surprising. Companies either grow or die, and the best way to grow is mergers/acquisitions. I guess I have hope that the passion I've seen from BRS on making reefing accessible and achievable will wind its way into Neptune Systems.

I personally place Neptune Systems as number 3 in the list of best monitoring/automation technology for a tank but I know they are predominant in our hobby and some outside investment might push them up the ranks to a better product.

Personally, I credit BRS video content for opening the reefing hobby to me so I'm willing to give them some slack and see what happens.

 

[stephj03]

Man, I was hoping to see a better rebound move.

2 miss steps like this Indicate a poor or inconsistently executed strategy, or a miss-understanding of the market.

Integrating horizontally (MD) makes sense if you get access to products that widen your P&L or cut out a true threat. MD was hardly the threat that SWA is....

Integrating vertically (Neptune) makes sense if it increases profitability of a wide swath of your P&L. But controllers are niche (I'd me shocked if they represent 15% of BRS gross) and buying the mfg of a product BRS doesn't sell a white labelled version of doesn't really add.

There's a short sighted vibe on both of these deals to me as though the cost of the deal was what made them attractive vs the actually growth acceleration potential of integrating.

Unfortunately the price point of both deals was likely inflated due to how well the hobby did during a pandemic yr full of stimulus money.

 

[ReefRxSWFL]

Failure of the new holding would be best for the hobby, and its a real possibility. Not sure Ryan and Andrew understand what it means to take cash from a private equity firm, as to other methods of generating capital, banks, going public, etc. Things a company who is doing well can do. Its the company version of the “payday loan”. Well run companies have bette ways to generate capital.

For the hobby, companies like Ecotech, Kessil, Sicce, GHL, all the CoralVue brands (Reef Octo, Maxspect,Abyzz, etc ) will have 2 choices. Take a big bite of the unwanted sandwich and support your competitor, knowing your products will not show as well on the site or will perform poorly in BRS Investigates, or say we can sell our products elsewhere.

 

[ReefRxSWFL]

Man, I was hoping to see a better rebound move.

2 miss steps like this Indicate a poor or inconsistently executed strategy, or a miss-understanding of the market.

Integrating horizontally (MD) makes sense if you get access to products that widen your P&L or cut out a true threat. MD was hardly the threat that SWA is....

Integrating vertically (Neptune) makes sense if it increases profitability of a wide swath of your P&L. But controllers are niche (I'd me shocked if they represent 15% of BRS gross) and buying the mfg of a product BRS doesn't sell a white labelled version of doesn't really add.

There's a short sighted vibe on both of these deals to me as though the cost of the deal was what made them attractive vs the actually growth acceleration potential of integrating.

Unfortunately the price point of both deals was likely inflated due to how well the hobby did during a pandemic yr full of stimulus money.

Finally, someone who has some fiscal understanding of whats going on.

i bet you bought stock in KoolAid too. Sales should increase due to how much earlier posts have been drinking.

 

[Operator Wrasse]

TO BE HONEST, I may take a step back from the conversion thread, not over the fact I will probably have to switch salt mixes as BRS is the only vendor I know that carries HW Marine Reefer...But...I want the conversion comparison to be fair and honest. I am not sure I can do that right now. Truly a sad day to me.

I think that it's even more important for you to continue with your comparison! I've noticed the writing on the walls with BRS's videos this year... notice all the product promotions and no investigations? They haven't been furthering the hobby, they have been furthering their business. I pledged my business to BRS because of their videos, but now I can't trust them. The MD merger I could understand. This vertical integration is sketchy and I won't trust anything BRS has to say until they prove themselves otherwise.

 

[ReefRxSWFL]

Viva la Profilux!

 

[ReefRxSWFL]

I think that it's even more important for you to continue with your comparison! I've noticed the writing on the walls with BRS's videos this year... notice all the product promotions and no investigations? They haven't been furthering the hobby, they have been furthering their business. I pledged my business to BRS because of their videos, but now I can't trust them. The MD merger I could understand. This vertical integration is sketchy and I won't trust anything BRS has to say until they prove themselves otherwise.

If i can get it elsewhere, i will.

Saltwater Aquarium.com & GHL Controllers!
Pay it forward!

 

[Drendo]

If this gets us a Trident with Nitrate and Phosphate sooner, I’m totally in favor. I will have a problem if they cut out the other suppliers and monopolize pricing.

 

[Drendo]

BRS is becoming the Amazon of the saltwater hobby

I’m pretty sure with one or two more more power moves, Amazon is going to start paying attention and will swallow the whole industry. Hope I’m wrong.

 

[ReefRxSWFL]

To everyone saying they are just going to shop with another online store now, why not give your LFS a shot or shop with a small mom & pop online store?

I would, but when i ask for something, they wont get it. Example:Asked for Larrys or Rods food, and thay said it doesn’t sell well. I said ill buy the entire minimum order each time. They still said no. Also, they always have empty spaces for popular products i need. Micobacter7, Coral Glue, Nori, etc. i find this out after i took my time and made the trip there.

 

[ReefRxSWFL]

You think amazon customer service is good? Sure they'll send out a replacement if it's broken, but will they take time to explain to you why you're eating up DI resin or how to use any of their millions of products?

I once ordered some Neonitro from amazon... they lost it twice, like it never made it out of the warehouse... sure they gave me a $10 voucher, but I still ended up ordering from BRS and it got to me sooner. And yes, this was a prime order.

Amazon has an amazing system that works 99.9% of the time, but that one time it doesn't, don't expect to get anyone to help that can actually help.

Amazon doesn't really care if you reef tank is in danger, their CEO is too busy almost becoming an astronaut... BRS might.

/step off soapbox

BRS customer service is marginal at best. It wont get better with less competition.

 

[stephj03]

The horizontal move here was to buy SWA, and/or be the "undisclosed private company" that PetCo unloaded Live Aquaria to last yr.

Buying MD instead only to discontinue all non-overlapping products does not position BRS better vs SWA IMO

If they now buy WWC bc of a red WWC webpage that says "west coast source" you'll know this is just playing with uncle scrooge's money as opposed to executing on a meaningful growth strategy.

 

[ReefRxSWFL]

Go to 16:30 in the video. Ryan said Trident 2.0
17:15. Terence said "this makes that more possible"

Basically, 2 mismanaged companies were cash poor, so taking a loan on your credit card will fix everything.

 

[ReefRxSWFL]

Man, I was hoping to see a better rebound move.

2 miss steps like this Indicate a poor or inconsistently executed strategy, or a miss-understanding of the market.

Integrating horizontally (MD) makes sense if you get access to products that widen your P&L or cut out a true threat. MD was hardly the threat that SWA is....

Integrating vertically (Neptune) makes sense if it increases profitability of a wide swath of your P&L. But controllers are niche (I'd me shocked if they represent 15% of BRS gross) and buying the mfg of a product BRS doesn't sell a white labelled version of doesn't really add.

There's a short sighted vibe on both of these deals to me as though the cost of the deal was what made them attractive vs the actually growth acceleration potential of integrating.

Unfortunately the price point of both deals was likely inflated due to how well the hobby did during a pandemic yr full of stimulus money.

Someone got excited that they found an investor who would hand over a pile of cash, and it was burning a hole in their pocket.

I think we are about to see a slow death to all brands involved.

 

[stephj03]

As to the German/EU quotient there's plenty of ways to interact without buying a German company if your strategy center is growth.

The controller company BRS just bought showed this with the lighting horizontal they accessed via a Dutch mfg.

BRS is USCAN centric, many German/Dutch/Austrian brands are not which makes a natural synergy for licensing/white label plays.

 

[ReefRxSWFL]

The horizontal move here was to buy SWA, and/or be the "undisclosed private company" that PetCo unloaded Live Aquaria to last yr.

Buying MD instead only to discontinue all non-overlapping products does not position BRS better vs SWA IMO

If they now buy WWC bc of a red WWC webpage that says "west coast source" you'll know this is just playing with uncle scrooges money as opposed to executing on a meaningful growth strategy.

I agree. I saw no advantage to MD, and Neptune becomes a liability. Im sure Ecotech wont mind if they don’t get that BRS Recommended on the Vortech, Vectra or Radion, because Neptune COR, Sky etc get that ranking.