이 기사는 2020년 06월 23일 08시00분 thebell에 표출된 기사입니다

South Korea’s SF Innovation is preparing to restart a sale process of its street food brands School Food and School Food Delivery after a failed attempt to sell them last year, sources said on June 19.

The company signed a memorandum of understanding last year with private equity firm Bayside Private Equity (Bayside PE) to sell School Food and School Food Delivery. It also operates Panda Express restaurants in Korea, bar chain Kimjakga, and Vietnamese restaurant brand Bun Cha Ra Boom, which were excluded from the planned sale.

But the deal eventually fell through because Bayside PE failed to raise enough funds to complete the transaction. The firm struggled to find investors even though any initial losses would have been absorbed by the equity tranche that SF Innovation chief executive, Lee Sang-yoon, then had agreed to take.

Bayside PE had reportedly offered about 30 billion won ($24.7 million) for the two divisions. Their value is estimated to remain almost the same as SF Innovation’s earnings and borrowing have not notably changed over the past year.

The company recorded revenue of 36 billion won in 2019, down about 7 percent from the previous year. Its gross borrowing and net borrowing were at 6.3 billion won and 3 billion won, respectively, at the end of 2019. It generated about 2.2 billion won in earnings before interest, taxes, depreciation and amortization for the four years through 2019.

“The delivery business is a main driver of SF Innovation’s growth. Investors’ outlook on that front is expected to play a key role in the sale,” said an industry insider. “The restaurant industry has been hit hard by the impact of Covid-19, so any potential buyers will likely take a cautious approach with their offers”

Founded in 2007, SF Innovation is a family-owned business. According to the company’s 2019 audited annual report, Lee is the largest shareholder with a 26.7 percent stake, with the remaining stake held by his family and relatives.

(Reporting by Byung-yoon Kim)