BRS acquires Marine Depot? WOW!

[Sleepydoc]

No, I Literally just meant a new buyer.

MD changed over the years. We've been a vendor for more than a decade. They used to have their own warehouses and massive shipping capabilities. In recent years, they've streamlined the operation, eliminating warehouses and functioning more as a marketing company than a traditional brick and mortar e-tailer.

I remember seeing lines of UPS trucks around MD, picking up the daily orders and not the little ones that run up and down our streets.

MD has a great and historic name. As I said, it would have been nice for a new buyer to come along and take all the positive things about MD and seek GROWTH by re-opening warehouses, etc.

Don't get me wrong, BRS has been fantastic for the hobby. Educating customers is the best way to develop customers that stay in the hobby longer. No doubt.

Ah, got it.

I work a couple miles away from BRS, so I generally get my supplies from either them or my LFS. I would occasionally shop MD, too, and never had any issues with them, but I can’t say I was a regular customer. Still, on balance I would have preferred MD to stay in business, too, strictly from a competition perspective. I think BRS is a good company, but even good companies benefit from healthy competition. Consumers do as well.

Like I said in my previous post, though, it doesn’t appear that there were any other viable buyers for MD since it appears they were looking to sell for at least 5 years. That being the case, I think BRS is preferable to bankruptcy or a corporation like Amazon or Petco. From the indirect reports I’ve seen, it seems like MD was in a bit of a slow spiral, so keeping it going as an independent retailer and building it back to where it was may have been a tall order. Lots of unknowns here, though.

 

[((FORDTECH))]

BRS has always treated me well. if i buy something and there's a problem, thye replace it. MD total opposite. I buy something from them and it comes defective, they tell me to goto the manufacture to get it fixed. i stopped buying from them after that.

BRS did the same thing to me so every situation is different and they all have the reasons why. But I would not stop buying from a company because of it that was your choice

 

[Jon Warner]

Ah, got it.

I work a couple miles away from BRS, so I generally get my supplies from either them or my LFS. I would occasionally shop MD, too, and never had any issues with them, but I can’t say I was a regular customer. Still, on balance I would have preferred MD to stay in business, too, strictly from a competition perspective. I think BRS is a good company, but even good companies benefit from healthy competition. Consumers do as well.

Like I said in my previous post, though, it doesn’t appear that there were any other viable buyers for MD since it appears they were looking to sell for at least 5 years. That being the case, I think BRS is preferable to bankruptcy or a corporation like Amazon or Petco. From the indirect reports I’ve seen, it seems like MD was in a bit of a slow spiral, so keeping it going as an independent retailer and building it back to where it was may have been a tall order. Lots of unknowns here, though.

I don't see a difference.

MD is gone. This isn't a "merger" or a new "mega-company".

This is BRS cementing their position as #1 in the industry. I give them mad props. There are just a few companies in the history of the hobby that were really dominant... and BRS is now right up there with Aquarium Systems (pre- Spectrum days).

The hobby has changed tremendously over the last 50 years. We used to be the little brother of the Freshwater hobby and most of our products were freshwater products that were "hopefully ok" in saltwater.

Now we have companies with multi-million dollar+ investments in technology, like Eco-Tech... and "NewEgg" style e-tailers.

For the most part... it's been great for the hobbyist. BRS became great because they took the reefer by the hand and educated him/her unlike anyone had in the past. For decades, we in the industry have talked about the "18 months and out" phenomenon of people running from the hobby. Now one can watch a handful of BRS videos and make it through the first few months AND know what/which products to purchase.

My only suggestion going forward would be for BRS to offer more product lines. There are currently products on the market that are "best in class" that BRS doesn't carry.

 

[Simon Reefing]

Marine depot was way better than BRS they gave me a gift card for items that I bought and they went on sale a few weeks later. They will be missed

 

[Sleepydoc]

I don't see a difference.

MD is gone. This isn't a "merger" or a new "mega-company".

This is BRS cementing their position as #1 in the industry. I give them mad props. There are just a few companies in the history of the hobby that were really dominant... and BRS is now right up there with Aquarium Systems (pre- Spectrum days).

The hobby has changed tremendously over the last 50 years. We used to be the little brother of the Freshwater hobby and most of our products were freshwater products that were "hopefully ok" in saltwater.

Now we have companies with multi-million dollar+ investments in technology, like Eco-Tech... and "NewEgg" style e-tailers.

For the most part... it's been great for the hobbyist. BRS became great because they took the reefer by the hand and educated him/her unlike anyone had in the past. For decades, we in the industry have talked about the "18 months and out" phenomenon of people running from the hobby. Now one can watch a handful of BRS videos and make it through the first few months AND know what/which products to purchase.

My only suggestion going forward would be for BRS to offer more product lines. There are currently products on the market that are "best in class" that BRS doesn't carry.

I agree with increasing the range of products. That’s one of the main reasons I would shop at MD.

I was thinking about what you wrote:
“MD is gone. This isn't a "merger" or a new "mega-company".”

Traditionally, When traditional brick and mortar companies merged, they will get new stores. Essentially they will get more brick and mortar. When an online company merges with another online company, what do they get? There are no physical stores to take over, so they are not really expanding the presence into new markets. They can take over the old company’s website and redirect it to theirs, but that really doesn’t add much. Vendor contracts most likely won’t carry over, So the only potential things of value that I can think of are the brand, sales data, and the functional elimination of a competitor. If you don’t continue the previous companies website then the brand is meaningless. If the other company was already in somewhat dire straits, then the elimination of a competitor is not much of a benefit either.

In the end, I’m having a hard time seeing how much of value Bulk Reef Supply obtained from this acquisition. What am I missing?

 

[((FORDTECH))]

Brs does not sell the simplicity dosing container 3 one liter compartments but marine depot did and I need one

 

[rtparty]

I agree with increasing the range of products. That’s one of the main reasons I would shop at MD.

I was thinking about what you wrote:
“MD is gone. This isn't a "merger" or a new "mega-company".”

Traditionally, When traditional brick and mortar companies merged, they will get new stores. Essentially they will get more brick and mortar. When an online company merges with another online company, what do they get? There are no physical stores to take over, so they are not really expanding the presence into new markets. They can take over the old company’s website and redirect it to theirs, but that really doesn’t add much. Vendor contracts most likely won’t carry over, So the only potential things of value that I can think of are the brand, sales data, and the functional elimination of a competitor. If you don’t continue the previous companies website then the brand is meaningless. If the other company was already in somewhat dire straits, then the elimination of a competitor is not much of a benefit either.

In the end, I’m having a hard time seeing how much of value Bulk Reef Supply obtained from this acquisition. What am I missing?

For one, BRS just got access to brands they didn't before. Aquamaxx being one of these.

MD wasn't financially in trouble per say but they have been stagnant for years. The hobby (and other companies) has grown quite a bit but MD hasn't. You can take from that what you will.

I bet we see BRS bring in plenty of new products they didn't have before.

 

[Jon Warner]

In the end, I’m having a hard time seeing how much of value Bulk Reef Supply obtained from this acquisition. What am I missing?

I've contemplated the same question.

From a strictly business perspective, they've eliminated a competitor. How much is that worth? I'm not sure.

Most acquisitions and mergers are made to allow the purchaser to enter a new market segment or expand their own segment. Look at Amazon buying Whole Foods. This allowed great opportunity for expansion to Amazon's fledgling grocery business. Look at WalMart buying Jet.com put WalMart into the e-commerce "Big League".

Louis Vuitton bought Tiffany to expand the size of their family of luxury brands.

PetsMart acquired Chewy.com

etc, etc...

Mergers and Acquisitions usually allow the expansion of a brand.

Prior to this news, I would have expected an announcement that BRS had bought out Eco-Tech... or maybe Neptune Systems to increase their profitability or even Worldwide Corals to expand into the livestock market.

EDIT: Not saying that any of those 3 companies are for sale or would sell...

But buying out Marine Depot?

In the business world, it's called a "Killer Acquisition".

It's buying a competitor to:

1) Take their talent.

2) Eliminate competition

3) Acquire their IP or Product lines

4) Acquire their inventory

5) Acquire a portion of their market share.

6) Acquire their Infrastructure, physical and digital including data.

 

[Brew12]

In the end, I’m having a hard time seeing how much of value Bulk Reef Supply obtained from this acquisition. What am I missing?

I suspect that they will see an increase in market share and gain some new product lines. It will probably also let them shed some less popular product lines that they keep just to fill out their selection.

I also suspect that they will have more leverage over manufacturers (for better or worse remains to be seen) to negotiate pricing.

 

[Cell]

One of the things pointed out specifically by Ryan in the announcement stream was the appeal of MD's website and blog/print content.

 

[NickSc]

Less competition. I don't like the idea.

 

[Jeffcb]

Amazing!

 

[Ascartes]

I can't blame a company for a strategic movement, but I'm sure it will turn out like the DrsFosterSmith that happened when they were acquired. Slowly loss the individuality and became the large company. All the unique lines were lost.

 

[9975]

I'm sad about this because Marine Depot was definitely a go to for me and BRS just seemed like the chick you never wanted to get caught going out with

 

[reefiniteasy]

I wonder what will be announced here. Hmmm…

 

[mike550]

I wonder what will be announced here. Hmmm…

So what was the news?

 

[reefiniteasy]

So what was the news?

“merger”

 

[mike550]

“merger”

Wait. The merger between Marine Depot and BRS or did BRS just acquire Neptune?

 

[rtparty]

Wait. The merger between Marine Depot and BRS or did BRS just acquire Neptune?

BRS "merged" with Neptune

 

[SuncrestReef]

Wait. The merger between Marine Depot and BRS or did BRS just acquire Neptune?

They didn't make the deal terms clear in the announcement video, but considering that BRS received a lot of cash from private investors earlier this year and recently acquired Marine Depot, I'm betting BRS acquired Neptune rather than just a merger or joint venture.