Korean popular pub operator Yukjun goes under mid-tier private equity fund

Korean PEF Keistone Partners will buy the operator of Yukjun Grandma Beer, a homegrown pub franchise gaining popularity among young beer lovers in South Korea through fresh draft choices and a variety of reasonably-priced side dishes.

According to the investment banking industry on Wednesday, the country¡¯s mid-tier private equity fund management firm signed a deal to acquire a 100-percent stake of Yukjun F&C, the operator of the hip pub chain first established in 2016, for 100 billion won ($78 million).

For the financing, the PEF will use capital from its fund formed last month and joined by the country¡¯s biggest investor National Pension Service, also the world¡¯s third largest pension fund.

The pub has recently grown fast, sprawled from 65 franchise stores in 2017 to 800 in 2022. Its operating profit rose from 600 million won in 2017 to 19.1 billion won as of 2021 on sales up from 1.4 billion won to 66 billion won during the same period. Its profit per restaurant amounted to 500 million won in 2020, sizable enough to attract prospective franchisees at a time when other offline franchise restaurants were hit hard amid the Covid social distancing.

Keistone bets on the brand¡¯s fast growth and room for further growth given its still low penetration rate in Seoul and its surrounding areas, where it can expect higher sales. In addition, the brand is expected to benefit from the return to normalcy from Covid-19 restrictions.

After the acquisition, the investment firm plans to add value to the pub chain through enhanced hiring and businesses with synergy.

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