According to the investment banking (IB) industry on the 29th, Anchor Equity Partners, a Hong Kong-based private equity fund (PEF) manager, the largest shareholder of A Twosome Place, recently contacted domestic and foreign PEFs and looked at the market reaction before going through the official sale procedure. Kolberg Kravis Roberts (KKR), which is famous in Korea as well as the successful sale of OB Beer, and Korea’s leading PEF manager boasting about KRW 5 trillion in assets under management (AUM) are known to show interest.
A Twosome Place is a representative coffee shop in Korea that started when CJ Foodville opened its Sinchon branch in Seoul in 2002. It is characterized by offering a variety of foods such as cakes and cookies while claiming to be a dessert cafe brand. From the opening of the 100th store in 2010 to the opening of the 1000th store in 2018, the company has greatly increased its popularity by expanding rapidly.
Anchor Equity Partners secured a 40% stake in A Twosome Place’s pre-IPO investment in February 2018. To this end, a special purpose corporation (SPC) was established with the Singapore Investment Corporation (GIC) and the Canadian Pension Investment Board (CPPIB). Subsequently, it acquired an additional 45% stake in May 2019 and a 15% stake in July last year to own the entire stake. Anchor Equity Partners has been continuously implementing the Value Creation Plan (VCP) since its minority equity investment in 2018, upgrading its membership program and remote ordering system.
According to the electronic disclosure system of the Financial Supervisory Service, a Twosome Place consolidated sales increased 33% from 274.3 billion won in 2018 to 365.5 billion won last year. In particular, it is evaluated that in 2020, despite the impact of COVID-19, sales increased by 10% compared to the previous year, giving Anchor Equity Partners confidence. In May of this year, preparations for listing were started, but it was abandoned within a month. As the KOSPI and KOSDAQ indexes have recently moved sideways and the public offering market bubble theory has been raised, it is interpreted that they judged that the sale would be more profitable than an IPO.
When Anchor Equity Partners first invested in 2018, A Twosome Place was valued at about 450 billion won. It is said that the company’s value at the time was 13 times higher than the previous year’s EBITDA. In the M&A market, the dominant view is that the price of A Twosome Place is still more than 10 times worth. This is in consideration of the fact that A Twosome Place is the second-largest operator in the coffee shop market after Starbucks, and that Gongcha Korea was sold at a corporate value of more than 12 times its EBITDA in 2019. A Twosome Place posted an EBITDA of 71 billion won on a consolidated basis last year, and a sale price of 600 billion to 800 billion won is being discussed.
Currently, acquisition candidates are mainly mentioned by financial investors (FIs), but strategic investors (SIs) are highly likely to show interest in the future. Recently, Shinsegae Group E-Mart became the largest shareholder by acquiring an additional 17.5% stake in Starbucks Coffee Korea.
An investment banking (IB) industry official said, “As the delivery market grows after Corona 19, we have found another market.” “From the perspective of major companies, it is worth adding a coffee franchise as a portfolio that will bring stable profits.” According to the Hyundai Research Institute, the annual consumption of coffee per adult in Korea in 2018 was 353 cups, which is about 2.7 times the world average consumption of 132 cups.
[강두순 기자 / 박창영 기자]
[ⓒ 매일경제 & mk.co.kr, 무단전재 및 재배포 금지]