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Alphonse

Future for KJ owned by Private Equity Group?

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This is somewhat old news from Sept. '18 but Kamado Joe was bought by a private equity group.  Of course all the press releases were positive about capital injection, bright futures, etc.  

 

My experience with private equity groups is less than positive.  The private equity funds typically buy it, put lipstick on the pig, and then sell it. 

 

I happened to call Kamado Joe last week and the lady that answered the phone was pitifully ill equipped to answer any of my questions.  When I asked if someone was there that could answer my questions about their ceramic, she said they were no longer there.   Kinda halted my studies and put a damper on my desire for a Big Joe.  

 

My call makes me wonder if the typical cost cutting and "lipsticking the pig" are underway.  If so, I hope they find a good buyer sooner rather than later and they don't ruin a decent product line and brand in the process.  

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I was evaluating a Big Joe vs. a Primo XL.  There is a fairly recent video out there by Primo of them firing a batch of Primo's and they'd also done a test by putting in some of their competitors grills.   The BGE behaved like a Primo in that it stood up to the firing.  The grill that appeared to be a KJ did not.  The ceramic had begin to deform at the firing temps in the Primo curing oven.  That made me wonder what the difference was in composition.  

 

Still having an interest in the Big Joe, I called KJ and inquired as to the current ceramic being used and its makeup.  The poor lady on the phone begin to tell me about the pH of the water in China and how they didn't have water like that in Mexico!  Of course she'd assumed I was bench-marking against BGE.  When I asked to speak to someone who could talk to me about the ceramic composition they use, she told me they were no longer there.  

 

With that info in hand, I did a search and found out KJ had been bought by an investment group.   BTW, I didn't really expect them to reveal the exact percentages of components in their ceramic mix but would have liked to know why theirs behave in a plastic way at the Primo firing temps.  

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I just worked with them over email to replace a cracked bottom unit. It was a pleasant experience for me. I have had the Big Joe 2 since Feb and there are two small cracks in the bottom unit. I submitted my warranty claim with pictures and I had a response the next day. A replacement is on it's way and should be here in a few weeks.

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I watched the video, for kicks.

 

The comparison in the kiln seemed a little silly. I’m not convinced that a Kamado failing under kiln-firing temperatures establishes that primo is somehow a better product than the competition.

 

I can put a match to a $100 bill, and it will most certainly burn; if I put a match to a penny, I might burn my fingers, but the penny should survive. Does that make the penny a better product than the $100 bill?

 

a penny can withstand a hammer blow, but my iphone, tv, car window, finger, etc. would certainly suffer damage. Same question...

 

 

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There does appear to be a difference in the ceramic composition between the two.  I was curious as to what it might be.  

 

Meanwhile the trajectory and outlook of KJ in the hands of the equity group was the point of the thread.   

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1 hour ago, Alphonse said:

There does appear to be a difference in the ceramic composition between the two.  I was curious as to what it might be.  

 

Meanwhile the trajectory and outlook of KJ in the hands of the equity group was the point of the thread.   

 

We could speculate all day on that I guess.  You would need a crystal ball to get the answers you are looking for.  

 

Quote

My experience with private equity groups is less than positive.  The private equity funds typically buy it, put lipstick on the pig, and then sell it. 

 

 

 

Is it your goal here to have someone change your mind on this?  Are you considering buying a Kamado Joe and are afraid to because you have had a bad experience with a private equity group?  Are you saying that this situation can't have a positive outcome?  I'm just unsure what you are saying, trying to say, or trying to figure out.  

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I figured that the intent was just to start a discussion, like a coffee break.  That's why I didn't ask–

  1. Why do you want to know the ceramic composition?
  2. What do you intend to do with the information, once you have it?

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37 minutes ago, John Setzler said:

 

We could speculate all day on that I guess.  You would need a crystal ball to get the answers you are looking for.  

 

 

 

Is it your goal here to have someone change your mind on this?  Are you considering buying a Kamado Joe and are afraid to because you have had a bad experience with a private equity group?  Are you saying that this situation can't have a positive outcome?  I'm just unsure what you are saying, trying to say, or trying to figure out.  

 

Thanks for the responses John.   Sorry I confused you.   

 

For clarity, perhaps just read my first post and we will leave it at that.

 

 

 

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Bobby Brennan still owns the company.  Private Equity firms are simply an alternative to taking a company public to generate additional operating capital.   I prefer private equality investing vs a company going public.  

 

Going public with public shares is where many companies have lost their souls and will to innovate.  Private Equity offers a limited number of investors to buy into the company.  It allows you to pick and choose who is allowed to invest in your company.  You make sure you’re picking people who share your vision for the business. 

 

When you go public, you loose all control over who can invest in your company.  

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31 minutes ago, Charcoal Addict said:

Bobby Brennan still owns the company.  Private Equity firms are simply an alternative to taking a company public to generate additional operating capital.   I prefer private equality investing vs a company going public.  

 

Going public with public shares is where many companies have lost their souls and will to innovate.  Private Equity offers a limited number of investors to buy into the company.  It allows you to pick and choose who is allowed to invest in your company.  You make sure you’re picking people who share your vision for the business. 

 

When you go public, you loose all control over who can invest in your company.  

 

Your information is incorrect.  Bobby is still the CEO but he is not the owner any longer. 

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25 minutes ago, John Setzler said:

 

Your information is incorrect.  Bobby is still the CEO but he is not the owner any longer. 

 

Okay.  He still has Owner of KJ listed on his Facebook profile.  That’s where the confusion comes in.

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I'll bet that the last time Bobby looked at his Facebook or Linkedin profile George Bush was still president. :)

 

Bobby and Kerry still have equity positions. 

 

Quote

Kamado Joe's founders, Bobby Brennan and Kerry Coker, reinvested alongside Dominus and Masterbuilt management in the transaction and will continue to participate in the ongoing business.  "With tremendous opportunities ahead, Kamado Joe has reached an inflection point in our growth story.  Our partnership with Dominus will provide the strategic and financial resources we need to become the clear kamado category leader and emerging lifestyle brand," said Mr. Brennan.

 

Kamado Joe was growing so much (new markets, more reach, more products, growing user base) they needed a better capitalization approach and the Dominus investment was one way to fund the expansion.  

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I see today that Primo has been bought by Empire Comfort Systems which also owns Broilmaster Grills. They say, for the moment at least, that manufacturing will remain in the USA.

 

Wondering if BGE might be looking to sell/cash out one of these days.

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