he only publicly traded pool builder in the nation has gone private.
Anthony & Sylvan Pools Corp., based in Mayfield Village, Ohio, bought stock back from shareholders who owned fewer than 100 of the company’s common shares. The offered price ($4) was approximately 49 percent higher than the stock’s average price of $2.68 this year.
At the close of the day on Nov. 21, the company had fewer than 300 shareholders left, qualifying it to deregister with the Securities and Exchange Commission and once again become a private company.
Anthony & Sylvan became a publicly traded company in August 1999. However, a recent law raised the compliance requirements on publicly traded companies, making it too costly and time-consuming to be part of the NASDAQ SmallCap Market, according to Bill Evanson, Anthony & Sylvan’s chief financial officer.
“Those things, we estimate, cost a company of our size anywhere from $350,000 to [more than] a half-million dollars once in full compliance,” Evanson said. “Being private will allow us to be able to focus our management time on operating and running the business.”
Evanson also said that being publicly traded hasn’t benefited shareholders as much as the company had hoped it would. “Our stock is very illiquid,” he noted. “Through the time that we filed the odd lot tender offer, 37 percent of the trading days in the NASDAQ stock market had no trades. The average day of trading over the last two-plus years is 200 shares per day.”
Consequently, investors didn’t have the benefit of knowing that shares could be sold or bought at will.
With a market capitalization of less than $30 million, the pool builder stands quite small compared with other NASDAQ firms, according to Evanson. So investment brokers and other companies weren’t motivated to investigate and analyze the company as an investment option.
Now the company is traded on the Pink Sheets quotation system, which isn’t a market and doesn’t have the same SEC compliance requirements as NASDAQ. Approximately 3,300 companies, including Nestle, trade on the Pink Sheets. On its first day on the new system, the company traded 9,875 shares at $4.60 to $4.90. “So there’s an active market for us,” Evanson said. “It’s just not the NASDAQ SmallCap Market.”
Anthony & Sylvan also reported its third-quarter results. Net sales for the quarter were more than $61 million, showing a 31.6 percent increase over the same period last year.
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