AS OSIM International's share price plunged over the past year, privatisation looked more and more attractive to founder and chief executive Ron Sim, even though he gave non-committal replies to anyone who asked. And then, he finally pulled the trigger.
Mr Sim will buy the remaining 30.75 per cent of OSIM that he and his family do not own at S$1.32 a share, said an announcement on the Singapore Exchange (SGX) on Monday.
This values the lifestyle products firm - which sells massage products, nutritional supplements and luxury tea - at S$978.9 million, more than eight times its valuation of S$120 million during its initial public offering (IPO) in 2000.
Contacted on Monday, Mr Sim told The Business Times: "Privatisation allows me to fast-track OSIM's growth strategically and opportunistically, and to make quick corporate decisions without all the regulatory protocols and processes."
"For the entire of last year, I've been thinking for this," he said. "I think I've reached a point where I'd prefer to be more nimble."
He has no plans to list the company elsewhere, Mr Sim said. As for potential acquisitions, "we have been looking for the last four years".
The offer price represents a premium of 31.8 per cent and 33.5 per cent to the volume-weighted average price for the corresponding one-month and three-month periods up to and including Feb 29, 2016.
Asked if shareholders have been given a chance to realise the stock's potential, Mr Sim said he has given "more than enough chance", pointing to the stock's dramatic surge from 5 cents in 2009 to S$2.90 in 2014. "I think in the last six to seven years, we've more than proven ourselves."
Last Tuesday, the counter jumped 10 per cent to S$1.225, prompting the Singapore Exchange (SGX) to issue a query on the unusual price movement after which the company halted trading the next day.
The privatisation attempt comes amid a management transition. Chief financial officer (CFO) Peter Lee, who has been with OSIM since 2000, will be on sabbatical leave from April to attend to personal matters. Juan Chow Yee, who was promoted to his current deputy CFO post last July, will be taking over Mr Lee's duties. Mr Sim said Mr Lee applied for the leave last year.
OSIM itself has been hit by weaker demand in the past year across its key North Asian markets, and also in Singapore and Malaysia.
One month ago, it reported full-year net profit of S$51 million for 2015, down 50 per cent from 2014. Revenue slipped 10 per cent to S$620 million.
Without one-off expenses of S$10.1 million of legal costs relating to its TWG Tea unit, and a S$5.6 million loss from closing down an underperforming Australian subsidiary, OSIM would have made an adjusted net profit of S$67.2 million.
This means Mr Sim is taking his company private at 14-15 times adjusted historical earnings, or 12 times earnings, excluding net cash of S$172 million.
Analysts generally deem Mr Sim's offer price as fair given tough economic and market conditions. Most had previously valued OSIM below Mr Sim's offer price.
CIMB Research said shareholders can switch to other current bargains. OCBC Investment Research, which had a "sell" call and 82-cent target price, said the offer was reasonable and recommended that shareholders accept it.
But DBS Group Research analyst Alfie Yeo said shareholders should consider whether they are in the money, and how Mr Sim's shareholding levels pan out in the next few trading sessions.
RHB Research said shareholders can realise their investment immediately for a significant premium over recent trading prices, but longer-term investors might not be as keen.
The story of OSIM's rise has often been cited as an exemplar of a home-grown business gone global.
Mr Sim quit school after his O Levels and became a household appliance salesman, setting up his first company in 1979 with four partners.
That did not work out, and he started R Sim Trading Company, a retailer of household goods such as knives, hand-held massagers and foot reflexology rollers.
Hit hard by the 1985 recession, he realised the Singapore market was too small. He expanded to Hong Kong the next year, Taiwan the year after, and entered Malaysia in 1990 and China in 1993. The company was renamed OSIM International in 1994 - the letter "O" adding a globe to the surname Sim, symbolising his world-conquering aspirations.
OSIM emerged from the Asian financial crisis stronger and listed on SGX in 2000 at 52 cents apiece. The early 2000s saw the company, known for its massage chairs, expand its product offering. It acquired the GNC franchise, which sells nutritional supplements.
A misadventure in the acquisition of US retailer Brookstone in 2005 led to the company eventually writing its investment off in 2009, in the midst of the global financial crisis.
Shares in OSIM bottomed at five cents that year, before staging a remarkable recovery along with China's continuing economic boom to hit a high of S$2.90 a share in April 2014. Investors were also buoyed by OSIM's luxury tea subsidiary TWG Tea, which became profitable the year before and was expanding to North Asia.
Hints of trouble appeared in October 2014 as OSIM's third quarterly net profit fell for the first time after 22 consecutive quarters of record profits. Consumer sentiment, and earnings, worsened over the next year. Mr Sim fended off privatisation questions at analyst briefings as OSIM's stock price continued to fall. To make matters worse, TWG Tea was embroiled in lawsuits, with one case on its former CEO and co-founder suing for minority oppression yet to be resolved.
The counter plunged further in 2016 with the market downturn, hitting a low of 77.5 cents in January.
But an improved Q4 2015 set of results, announced at the end of January, had prompted DBS to upgrade the stock from "fully valued" to "buy".
Its target price of S$1.28, based on 14 times historical earnings ratio and projected earnings of 9.2 cents a share in 2016, still fell slightly short of Mr Sim's S$1.32 offer.
Mr Sim told BT that listing had its benefits for companies, up to a point.
But asked if OSIM's 16-year journey in the public eye had been worthwhile, there was a long silence on the line. "Maybe I don't comment. It's not fair," he said.
OSIM resumes trading today.