[Edaily Marketin Song Seung-Hyeon Reporter] The final bidding for the sale of Mom’s Touch has been postponed to December. With a major domestic retail strategic investor (SI) entering the race, the due diligence period has been set for November, and the final bidding has been delayed by one month. Unlike the first sale of 2022, which was dominated by overseas buyers, a competition between domestic and international candidates has now emerged, drawing attention to whether the valuation will reach around 1 trillion won.

According to investment banking (IB) industry sources on the 9th, KLN Partners and the lead underwriter, Citi Global Markets Securities, have postponed the final bidding for Mom’s Touch—originally scheduled for November—to December. The asset up for sale is the 100% stake in Mom’s Touch & Company held by KLN through the special purpose company (SPC) Korea F&B Holdings.

In a typical divestiture process, after the preliminary bidding phase, candidates on the shortlist undergo due diligence and participate in the final bidding, and the seller selects one of them as the preferred bidder. The shortlist usually consists of two to three candidates, or at most four.

It is reported that a major domestic retail strategic investor (SI) expressed interest in Mom’s Touch as early as the preliminary due diligence stage. As this SI joined the bidding process, it became necessary to secure additional time for due diligence, prompting the selling party to adjust the schedule for the final bidding round. For KLN, this increased the potential to drive up the sale price through competition among bidders.

During the first sale in 2022, this competitive dynamic did not materialize. At that time, the preliminary bidding primarily involved overseas bidders such as PAG, Goldman Sachs PIA, and YUM!, but the momentum did not carry through to the final bidding stage. The deal fell through because the price in the 600 billion won range proposed by PAG fell short of the sellers’ expectations.

Mams Touch recorded consumer spending of 1.0058 trillion won last year across its approximately 1,490 stores nationwide, surpassing the 1 trillion won mark for the first time. However, the industry consensus is that, as the domestic store network has become densely saturated, further growth depends on overseas expansion.

An investment banking industry official said, “Since overseas expansion potential is a key factor, I thought global private equity firms like Bain Capital—which recently acquired Gongcha—might show interest, but with domestic strategic investors entering the fray, competition is likely to become even fiercer.” Previously, Bain Capital acquired Gongcha for approximately 900 billion won. Industry observers believe that a valuation of around 1 trillion won can only be achieved if a balanced mix of domestic and international buyers fills the shortlist of three to four candidates and competition persists through the final bidding stage.

With the final bidding for Mom’s Touch pushed back to December, the timeline now aligns with the sale of BKR, the operator of Burger King. Affinity Equity Partners is moving forward with the sale of its 100% stake in BKR. BKR’s earnings before interest, taxes, depreciation, and amortization (EBITDA) last year was 106 billion won, a scale similar to Mom’s Touch, and a valuation of up to 1 trillion won is being discussed.

Since the sale of BKR is also scheduled for the end of the year, the price confirmed in the Mom’s Touch final bidding is highly likely to serve as a benchmark for negotiations. Given that Gongcha and Bonchon were sold at prices below initial expectations, the multiple Mom’s Touch is able to secure is expected to serve as a yardstick for gauging the price range of hamburger franchise deals at the end of the year.