이 기사는 2020년 06월 01일 08:00 더벨 유료페이지에 표출된 기사입니다.
IMM Private Equity (IMM PE) has entered a process to sell South Korea’s Hollys F&B, which operates the coffee brand Hollys Coffee. The PE firm is expected to select shortlisted bidders in the near term.
IMM PE and Goldman Sachs, which is acting as financial adviser to IMM PE, have received non-binding offers for the coffee chain from potential buyers, according to sources familiar with the matter on May 28. They are expected to draw up a shortlist of candidates and notify them in early June. Shortlisted candidates will be allowed to conduct due diligence via a virtual data room on the company. The seller is likely to hold a final round of bidding by the end of the first half of the year.
After acquiring Hollys F&B in 2013, IMM PE made partial exits through recapitalizations, which led to distributions worth all of the capital invested in the coffee chain to its investors. So, to generate a higher internal rate of return, the firm will likely put its focus on getting the company sold at its highest possible price.
The latest deals in the country’s food and beverage (F&B) sector include Unison Capital’s sale of Gong Cha Korea for 350 billion won ($283 million), which was equivalent to a multiple of 10.9x the bubble tea chain’s 2019 EBITDA. If this valuation multiple is applied to Hollys F&B, the expected price for the company would be 473 billion won. Yet, unlike Gong Cha with its geographical footprints not only in Korea but also in Taiwan and Japan, Hollys F&B generates most of its revenue from the domestic market.
Hollys F&B opened its first store in Gangnam district in 1998. The country’s first coffee chain has grown to have more than 500 stores nationwide, of which around 20 percent are operated directly by the company.
After acquired by IMM PE, the company put 10 billion won to build a coffee roasting facility in Gyeonggi Province in 2018. Hollys F&B has recently established its own system called H-MAP, which enables the firm to analyze its customer base and behavior through its aggregated big data.
IMM PE is expected to carefully select its shortlisted candidates, putting extra weight on their likelihood of completing the race.
“Market insiders are paying close attention to the results of Hollys F&B deal though many companies in the F&B sector are currently up for sale. Hollys F&B will be able to find its new owner if the seller and prospective buyers reach an agreement on [Hollys F&B’s] valuation,” an investment banking industry source said.
(Reporting by Ar-rum Roh)