Hong Kong fund to sell Japan, S.Korea Burger King business in deal over $1bln - source (updated)

Restaurant Brands Asia

18/01/2022 06:17

(Updates sourcing, adds detail)
    By Kane Wu
    Hong Kong, Jan 18 (Reuters) - Private equity firm Affinity
Equity Partners is this week launching the sale of its Burger
King fast-food businesses in South Korea and Japan, in a deal
that could fetch more than $1 billion, a person with knowledge
of the matter told Reuters.
    Hong Kong-based Affinity has appointed Goldman Sachs to run
the sale, which is targeting both private equity investors and
strategic buyers, said the person, who declined to be identified
as the information is confidential. 
    The bank declined to comment.
    Affinity bought full control of Burger King South Korea in
2016 for about $170 million and a year later acquired the
American fast-food brand's Japan franchise. 
    The South Korean business reported 680 billion won ($572
million) in revenue in 2021, with adjusted earnings before
interest, taxes, depreciation, and amortization (EBITDA) at 80
billion won ($67 million), said the person, adding its adjusted
EBITDA in 2022 is expected to reach 100 billion won.
    Burger King Japan's adjusted EBITDA in 2021 was 700 million
yen ($6 million), the person said.
    Global fast-food chains such as McDonald's and Yum! Brands
are trading at 20 to 30 times their EBITDA, Refinitiv Eikon data
showed. Burger King India  BURG.NS  is trading at about 25 times
of its EBITDA. 
    Affinity and Burger King Japan did not immediately respond
to a request for comment.
    An official at BKR Corporation, the operator of Burger King
in South Korea, declined to comment. 
    The Nikkei business daily first reported the sale on Monday.
    It comes as the consumer and retail sector faces tremendous
challenges and disruption caused by the coronavirus pandemic.
    In South Korea, businesses have adapted by relying more on
deliveries, which has prompted exponential growth for its food
delivery apps.  urn:newsml:reuters.com:*:nL1N2PK0IP
    Burger King Korea said on Monday the number of monthly
active users on its mobile app in December exceeded 1.4 million,
the highest since the app was launched in May 2016.
    Since Affinity's acquisition, Burger King has been in an
expansion mode in South Korea and Japan.
    Burger King runs 440 outlets in South Korea, more than its
rival McDonald's. 
    The Japan franchise said on Monday it would open three new
outlets in January, bringing the total there to 149, with plans
to open more "aggressively" in 2022.
 ($1 = 114.4800 yen)

 (Reporting by Kane Wu in Hong Kong, additional reporting by Sam
Nussey and Rocky Swfit in Tokyo and Joyce Lee in Seoul, Editing
by Louise Heavens)
 ((sam.nussey@tr.com;))