[Edaily Marketin Song Seung-Hyeon Reporter] As the sale of Mom’s Touch comes into view, the consumer goods sector is gaining prominence in the mergers and acquisitions (M&A) market. Amid a succession of franchise deals valued in the trillions of won, a trend continues in which global capital is acquiring brands nurtured by domestic private equity funds (PEFs).

According to investment banking (IB) industry sources on the 27th, KLN Partners and the lead underwriter, Citigroup Global Markets Securities, plan to hold the final bidding round for Mom’s Touch next month. The sale targets the 100% stake in Mom’s Touch & Company held by KLN through the special purpose company (SPC) Korea F&B Holdings. The enterprise value expected by the sellers is around 1 trillion won; considering last year’s earnings before interest, taxes, depreciation, and amortization (EBITDA) in the 100 billion won range, this represents an enterprise value (EV) to EBITDA multiple of approximately 10x.

Mom’s Touch’s consolidated revenue increased by 65.8% from 288.9 billion won in 2019, when KLN acquired the company, to 479 billion won last year. During the same period, operating profit rose by 373% from 19 billion won to 89.7 billion won, and the operating profit margin stood at 18.7% last year. Consumer spending at approximately 1,490 stores nationwide totaled 1.0058 trillion won, surpassing the 1 trillion won mark for the first time since the company’s founding. Starting with a master franchise agreement in Thailand, the company has expanded its overseas presence by opening a pop-up store in Tokyo in 2023 and its first company-owned store in Japan in 2024. At the first store in Singapore, which opened on the 14th of this month, about 200 people were waiting in line even before the doors opened.

There have been two consumer goods M&A deals finalized this month alone. On the 5th, Bain Capital agreed to acquire a controlling stake in the bubble tea franchise Gongcha from TA Associates and others. The deal is valued at $635 million, or approximately 900 billion won. Gong Cha operates over 2,200 stores across 33 markets worldwide and sells more than 150 million cups annually; approximately 40% of its total stores are located in South Korea.

Five days later, VIG Partners signed a share purchase agreement (SPA) with Thailand’s Minor Group to sell its controlling stake in Bonchon International. VIG successfully exited the investment eight years after acquiring a 55% stake for approximately 60 billion won in 2018. The number of global stores, which stood at 325 at the time of the acquisition, has grown to around 500, and revenue has risen from 17.8 billion won in 2019 to 43.2 billion won last year.

There are also a number of other properties on the market. Q Capital Partners and Coston Asia have selected BDA Partners as their financial advisor and are moving forward with the sale of 100% of their stake in Norang Tongdak. With approximately 900 stores nationwide, the company generated 133.6 billion won in revenue last year, and the expected sale price is around 200 billion won. BKR, which operates Burger King and Tim Hortons, is also scheduled for a sale by the end of the year. Affinity Equity Partners, which holds a 100% stake, has selected Deutsche Securities as the lead underwriter, and a valuation of up to 1 trillion won is being discussed.

A notable trend in consumer goods transactions is the continued acquisition of companies by global capital. Bonchon was acquired by Thailand’s Minor Group, while Gongcha was acquired by Bain Capital’s Japan team. The Philippine-based Jollibee Group acquired Compose Coffee in 2024 and Shabu All Day this year. Analysts note that as the spread of the Korean Wave has proven the scalability of K-franchises, a pattern has emerged in which Asian strategic investors (SIs) and global private equity funds (PEFs) are using Korean brands as a springboard for growth. Mom’s Touch, which is also set for a sale, is reportedly attracting interest from global capital.

Of course, there remains a gap in expectations regarding price. Gongcha was sold for a figure significantly lower than the $2 billion (approximately 2.7 trillion won) initially discussed, and critics continue to point out that franchise transaction multiples have not yet recovered to pre-COVID-19 levels.

An investment banking industry insider stated, “Given the glut of properties on the market, demand will likely concentrate on brands that have demonstrated scalability through their financial performance and international success.”