South Korean private equity firm Unison Capital is selling its Gong Cha bubble tea franchise in a deal likely to fetch up to US$442 million.

The company purchased the brand four years ago for KRW34 billion ($30 million), before taking over its global headquarters in Taiwan in a KRW40 billion ($35.45 million) deal in 2017. The brand’s HQ operates stores in 16 countries.

The offer has attracted interest from major South Korean F&B players, considering the brand’s stable cash flows and EBITDA margin of 24–25 per cent, compared with Starbucks’ 21 percent.

The brand runs 448 outlets within South Korea, and derives 70 percent of its sales from directly managed stores within Korea and Japan. The firm plans to expand its global store count from 900 to 1700 by 2021, expanding into 10 more countries during the period – with concrete plans to establish stores in the UK, Mexico, Thailand, Indonesia and Cambodia.

Sales are forecast at KRW180 billion ($159.54 million) this year, compared to KRW134 billion ($118.77 million) last year.

Micheal Arnold – Inside Retail Asia