KKR-backed massage chair business files for Hong Kong IPO

KKR agreed to invest up to SGD 500m (USD 366m) in V3 Group, a Singapore-based business with interests spanning brands, real estate, and healthcare services, in 2018 at an enterprise valuation of SGD 1.7bn. The goal was to support the expansion of V3 Group’s brand portfolio, starting with OSIM in China and TWG Tea in Japan.

The private equity firm committed SGD 250m upfront and had a call option for another SGD 250m in shares constituting an up to 16.8% stake in what became V3 Brands Asia. KKR, which invested via its third pan-Asian fund, now owns 24.2% of V3 Brands Asia, with V3 Group maintaining a controlling stake through V3 Brands, according to a prospectus.

The filing follows a restructuring of V3 Group into three divisions: V3 Brands; V3 Capital, an investment unit; and V3 Assets, which owns various real estate and healthcare services businesses.

V3 Brands was also reorganised. OSIM was effectively carved off under V3 Brands Asia while other assets stayed with V3 Brands. TWG is part of a gourmet unit under V3 Brands alongside Bacha Coffee and Casablanca restaurant Le Cabestan. V3 Brands also owns wellness supplements brand LAC, store fixtures specialist Futuristic Fixtures, and has a stake in cheesecake retailer Cat & the Fiddle.

OSIM offers three categories of products: well-being chairs and massage chairs, which account for approximately 70% of overall revenue; massage products such as lower and upper body massagers and portable massagers; and other lifestyle and wellness products, including massage chairs for gamers, fitness and health monitors, air purifiers, humidifiers, and travel and beauty accessories.

It claims several signature and patented massage technologies, among them the v-hand massage, which delivers an authentic hand-grip massage experience, and the four-hand massage, which replicates the sensation of being massaged by two synchronised massage therapists.

The company also offers a wellbeing app that connects products and services, and it is working on products that leverage digital technology, artificial intelligence, machine learning, the internet of things, and virtual reality.

Products are distributed through a network of 338 own-brand stores across Greater China and Southeast Asia, including 186 in mainland China, 53 in Taiwan, and 45 in Malaysia. In addition, there are 115 franchise stores – 89 in Asia Pacific, 20 in the Middle East, and six in Europe and North America. Taiwan is the single largest revenue contributor, followed by mainland China.

Revenue came to SGD 377.8m in 2020, up from SGD 326.9m the previous year. Over the same period, net profit rose from SGD 27.3m to SGD 43.4m. For the first nine months of 2021, revenue and net profit were SGD 332.8m and SGD 72.7m.

In a statement announcing the V3 Group restructuring, Jaka Prasetya, a partner at KKR, said: “We strongly believe in the continued growth of Asia’s consumer sector. This re-organisation by V3 Group will further enhance its ability to build brands and capture opportunities across Asia and beyond.”

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• Topics
• Southeast Asia
• Greater China
• Consumer
• IPO
• Singapore
• KKR