Pool Corp. (POOL) announced on Monday that it will acquire privately held General Pool & Spa Supply Inc., a regional swimming pool and spa products distributor, to strengthen its market positions and leverage the latter’s technology platform and spa parts expertise.

The transaction is expected to close in mid-October. Management expects this acquisition to be accretive in 2010 earnings and beyond.

Based in Northern California, General Pool & Spa manages 10 distribution sales centers and generates approximately $40 million in annual net sales. It is a well known and a reputed distributor in the industry and has an excellent customer servicing track record.

Pool, the world’s largest wholesale distributor of swimming pool supplies, equipment, and related products, posted earnings of 99 cents per share in the second quarter. The results were 9 cents above the Zacks Consensus Estimate.

Revenues for the swimming pool supply wholesaler fell 13% year over year as the company faces the toughest operating environment in its history. New pool construction is down sharply as the recession is forcing consumers to cut back on expenditures. The company was successful at implementing cost savings initiatives; however, selling, general, and administrative expenses were down 15% year over year. As a result, operating income fell only 9% versus the prior-year period.

The company also managed to reduce debt levels by $76 million and coupled with the impact of lower interest rates, interest expense fell 38%. We consider the results to be impressive given the challenging operating environment.

We expect that with the improvement in economic environment, Pool may benefit from pent-up demand. Additionally, such strategic acquisitions should benefit the company going forward.

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