|A Twosome Place image seen on the coffee chain's official website / Courtesy of A Twosome Place|
By Anna J. Park
The Carlyle Group plans to acquire Korea's No. 2 coffee chain, A Twosome Place, for around 800 billion won ($669 million). The global investment firm is known to be in the final phase of negotiations with Hong Kong-based Anchor Equity Partners, the current owner of the franchise.
The final acquisition agreement is set to be signed soon, after the two sides iron out the final details.
If the deal is finalized, Anchor Equity and its partners are expected to reap almost a 100 percent return on their investments after just a few years. Anchor Equity previously aimed to pursue a public offering of the coffee chain in May this year, but changed its plan after Carlyle and other global investment firms showed keen interest in buying the brand.
Market insiders said the homegrown coffee chain's solid performance during the pandemic was the key factor that attracted the interest.
A Twosome Place's annual revenue increased more than 10 percent year-on-year to 360 billion won in 2020, while its operating profit margin stood at over 10 percent. The coffee house's expanded delivery service has been one of reasons behind the revenue growth even during the COVID-19 pandemic.
Originally launched by CJ Foodville, A Twosome Place opened its first store in 2002 in western Seoul's Sinchon area. The number of nationwide coffee chains grew quickly to exceed 1,400, with dozens of overseas branches.
Although the coffee brand had been a lucrative arm of CJ Group, it was sold to a group of foreign investors ― Anchor Equity, Singaporean sovereign wealth fund GIC and the Canada Pension Plan Investment Board (CPPIB) ― for the 2018-2022 period for some 450 billion won, as CJ Foodville sought to improve its financial structure.
If Carlyle acquires the coffee chain, it will be its first investment in the Korean market in three years. The global investment firm left the Korean market with the successful sale of ADT Caps to SK Telecom in 2018. Carlyle intended to resume investments in the Korean market earlier this year, when it considered an acquisition of bakery franchise Tous Les Jours. However, the deal fell through during the negotiation process.