이 기사는 2020년 01월 09일 08시00분 thebell에 표출된 기사입니다

South Korean private equity firm SkyLake Investment is expected to sell its steak restaurant chain Outback Steakhouse Korea at a much higher value than the price it paid for the business in 2016.

SkyLake Investment recently picked Credit Suisse to handle the sale process. The homegrown private equity firm seeks to apply multiples that have been paid for latest buyout transactions in the food and beverage sector, such as KL&Partners’ acquisition of Haimarrow Food Service and TA Associate’s purchase of Gong Cha Korea.

“Business operations of Haimarrow Food Service and Gong Cha are not exactly the same with those of Outback, but these two companies can be considered peers as they both are franchise businesses in the food and beverage sector,” said an industry insider. “Similar EV/EBITDA multiples have been applied to both deals and this may also be the case for the valuation of Outback.”

KL&Partners last year is said to have acquired Haimarrow Food Service – the operator of South Korea's famous fast-food chain Mom's Touch – at EV/EBITDA multiple of around 10 times. This compares with an average multiple for other domestic food and beverage companies of 6~8 times. The fast-food chain operator’s higher valuation reportedly reflected factors that could lead to faster growth – such as its potential of further expansion in the metropolitan area and strong price competitiveness.

Unison Capital-backed Gong Cha was also sold to U.S. private equity firm TA Associates last year at EV/EBITDA multiple of about 10 times based on financial performance in 2018. TA Associates reportedly paid 350 billion won ($302 million) for the bubble tea chain. The difference between enterprise value and equity value was small because the company’s net borrowing was less than 6.3 billion won ($5.3 million). Gong Cha reportedly recorded EBITDA of 32.5 billion won ($27.7 million) in 2018.

Gong Cha’s enterprise value has grown significantly under Unison Capital’s ownership. In 2014, Unison Capital bought approximately 65 percent stake in the bubble tea chain from Royal Tea Taiwan in a deal that valued a 100 percent equity interest at about 52.3 billion won ($44.6 million). In 2017, the private equity firm also acquired a controlling stake in Royal Tea Taiwan, accelerating its efforts to help the portfolio company grow in size.

Outback Steakhouse Korea has seen the upward trend in earnings performance under SkyLake Investment's ownership. In 2019, the steakhouse chain is expected to have recorded EBITDA of 26.5 billion won ($22.6 million), up almost 18 percent from the previous year. Given this expected growth in EBITDA, multiple of 10 times would make enterprise value of 265 billion won ($226 million).

This represents about seven-fold growth in enterprise value compared to 2016 when SkyLake Investment bought a 100 percent stake in the steak restaurant chain from Bloomin’ Brands for about 57 billion won ($48.8 million). At the time, Outback Steakhouse Korea had net cash of 20 billion won, which translates into the estimated enterprise value of 37 billion won ($31.6 million). Considering EBITDA of 10.8 billion won in 2015, SkyLake Investment paid EV/EBITDA multiple of about 3.4 times for the business.

“It is too early to estimate enterprise value since we need to consider Outback’s 2019 financial performance as well as due diligence results,” said an industry insider. “But a steep upward trend in Outback’s earnings should work in favor of enterprise value.”

(By reporter Kim Byung-yoon)