(Captured from KFC Korea website)
Global private equity firm Carlyle Group will acquire chicken franchise KFC Korea. As a result, A Twosome Place, a cafe franchise under Carlyle’s portfolio, will expand its business structure to encompass the broader food service industry. Orchestra Private Equity (PE), which is selling KFC after 2.5 years of ownership, is expected to earn triple returns.
According to investment banking (IB) industry insiders on Dec. 19, Carlyle recently signed a main contract to acquire 100% of KFC Korea’s shares. While the specific transaction price has not been disclosed, the industry expects it to be worth around 200 billion won. The deal is expected to close in the first quarter of next year.
Orchestra PE acquired KFC Korea from KG Group for approximately 70 billion won in early 2023. At that time, KG Group was selling non-core assets to improve its financial structure, and Orchestra PE acquired the company and has been conducting management efficiency improvements.
The reason Carlyle focused on KFC Korea lies in its stable profitability. KFC Korea’s revenue last year was approximately 300 billion won, with EBITDA of 46 billion won. With an EBITDA margin exceeding 15%, its cash generation capability has been proven. The visible performance improvement was driven by Orchestra PE’s restructuring efforts following the acquisition, including menu diversification and delivery channel strengthening. Performance has further improved this year. First-half revenue reached 167.8 billion won, recording the highest level ever. Operating profit was 9.3 billion won, an increase of approximately 40% compared to the same period last year.
Carlyle Group is the major shareholder of A Twosome Place. The group chose bolt-on transactions (additional acquisitions of similar companies) to enhance A Twosome Place’s value. A Twosome Place will break away from its cafe-centered business structure and diversify its portfolio across the broader food service industry.
Carlyle has been focusing on external expansion since acquiring A Twosome Place for approximately 1 trillion won in 2021. Last year, it acquired KFC Holdings Japan. The business diversification strategy has been influenced by Moon Young-ju, the current CEO of A Twosome Place. Moon is recognized as a leading professional manager in Korea’s food and beverage franchise industry. She gained recognition for her expertise by introducing American family restaurant Bennigan’s to Korea and serving as CEO of Burger King for 10 years afterward. Moon joined A Twosome Place in 2023, and it is evaluated that Carlyle’s corporate value enhancement and Moon’s management philosophy are creating synergy.
