Korea's home-grown Mom's Touch drawing buyout bidders next month

The sale of Mom’s Touch, a home-grown burger franchise in South Korea, has added speed after its owner has completed buyback and changed manager to oversee the M&A.

According to the investment banking industry on Thursday, KL & Partners, the local private equity firm owning the burger franchise since 2019 has had its new sales manager hand out teasers inviting institutions to a preliminary bid next month.

The fund is putting up entire 100 percent stake it holds through a special purpose company Korea F&B Holdings. Mom’s Touch exited from the Kosdaq market last month ahead of the sale.

KL & Partners has been readying the sale since the beginning of the year in hopes to complete the deal by the year-end. It keeps to the plan although changing the sales advisor from Bank of American Merrill Lynch to Deutsche Securities.

The private equity firm bought a 56.8-percent stake in the burger franchise from its founder Chung Hyun-sik in 2019 at 193.8 billion won ($135.44 million). It bought back the outstanding shares from the market at 6,200 won per share ahead of delisting.

Last year, the firm’s EBITDA (earnings before interest, tax, depreciation, and amortization) amounted to 44 billion won. Although smaller than 74.5 billion won EBITDA of Burger King, also up for sale, the company does not have to pay any royalties and has room for global expansion.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]