KKR pays up to S$500m for 'significant stake' in OSIM owner V3

PRIVATE equity firm KKR is taking up a "significant stake" in massage chair and lifestyle products group V3, the owner of the OSIM and TWG Tea brands said on Tuesday.

KKR will invest up to S$500 million in V3, at an enterprise value of approximately S$1.7 billion. It declined to comment on the exact mix of equity and debt financing. KKR is making the investment from its Asian Fund III.

Ron Sim, founder, chairman and chief executive of V3 said in a statement: "I am extremely pleased to welcome KKR as a significant shareholder in V3. I am confident this investment will position the company for our next phase of growth, starting with the immediate expansion of TWG Tea in Japan and the US, and of OSIM in China."

KKR partner Jaka Prasetya said the investment underscores KKR's strong belief in the continued growth of the region's consumer sector: "We aim to provide support and capital to successful homegrown, regional companies like V3 in order to capture opportunities across Asia and beyond."

Mr Sim told The Business Times in June that V3's annual revenue climbed back above the S$600 million mark last year, on organic growth across all business segments. Net profit also rose, he said.

In April 2017, Mr Sim had applied for V3 to be listed on the Hong Kong Stock Exchange via an initial public offering (IPO), but that application lapsed in October of the same year. Mr Sim told BT in June that he wasn't in a hurry to proceed with an IPO, since an IPO is a function of valuations, and he was busy with many private options too.

Before Mr Sim repackaged his company as the V3 Group and acquired Futuristic Store Fixtures, OSIM International was valued by him at S$1 billion, based on the price offered to shareholders to delist OSIM from the Singapore Exchange in 2016.

Headquartered in Singapore, V3 has a presence in over 100 cities in 26 countries around the world. The largest chunk of V3's revenue comes from sales of OSIM massage chairs. V3 also owns luxury tea brand TWG Tea, as well as franchise rights to the GNC nutritional supplements brand in Singapore, Malaysia and Taiwan.

V3 was advised by investment banking advisory firm Evercore on the KKR deal.

Keith Magnus, chairman of Evercore Asia, said: "The luxury lifestyle and wellness industry continues to be a sector of exciting growth in Asia, proliferated by rapidly rising consumer affluence throughout the region.

"Evercore has seen tremendous M&A (merger and acquisition) activity in this space, having advised on over S$12 billion worth of consumer retail deals in South-east Asia over the last three years and over S$100 billion worth of deals in the region."