BTS-loved kombucha brand Teazen up for sale

The majority shareholder of South Korea’s fine tea brand Teazen Co. is seeking to sell ownership of the company, attracting multiple potential buyers after a BTS member Jungkook revealed himself as a regular drinker of its kombucha during live streaming at the end of February.

According to the investment banking industry on Apr. 29, IBK-TS Exit PEF -- an investment consortium of Industrial Bank of Korea and TS Investment -- closed the preliminary bidding for a 70% stake of the tea company. Samil PwC is the underwriter for the deal.

Sources say that the bidding has successfully attracted a number of potential buyers, including domestic and international PE firms. 

IBK-TS Exit PEF had originally pushed for an IPO in 2019, but later decided to sell the majority stake after multiple parties tapped the consortium for acquisition.

Teazen holds the third-largest share of the domestic tea market, after Amorepacific Group’s Osulloc and the country’s instant coffee giant Dongsuh Co.

The company posted 20.4 billion won ($18.4 million) in revenue last year, while its EBITDA came in at 5.5 billion won ($4.9 million).

It is reported that the consortium is asking for 70 billion won ($63 million), referring to EV/EBITDA multiples of its peer group, such as Hollys Coffee with a multiple of 6.5 and A Twosome Place with 13.

The IBK-TS Exit PEF originally acquired a 70% stake in Teazen shares at around 20 billion won ($18 million) in 2018.

Teazen, a compound word of “tea” and “zen”, was established in 2001 by its current CEO Kim Jong-tae, who previously led the launch of the country’s largest tea brand Osulloc while working at Amorepacific.

Teazen operates three tea farms and two manufacturing facilities in Korea, as well as an R&D facility.

The tea company recently saw a sharp revenue hike, a fivefold jump from its typical sales level, after the BTS member Jungkook publicly acclaimed its kombucha product.

“We are flooded with export inquiries by overseas F&B companies, after Jungkook’s mention of our kombucha drink” said an IBK-TS Exit PEF spokesman.

Analysts highlight that the potential buyer must also factor in the recent thriving activity of Teazen’s B2B business, supplying its products to 150 clients including domestic and international F&B companies, as well as coffee and beverage franchises.

Write to Jun-ho Cha at chacha@hankyung.com
Daniel Cho edited this article.