Anchor Equity eyes IPO of coffee chain A Twosome Place

A Twosome Place is poised to be South Korea's first listed coffee chain as its owner Anchor Equity Partners has kicked off the process of its initial public offering.

The coffee store operator recently sent requests for proposals to major brokerage companies to select IPO managers, according to investment banking sources on May 3. Its IPO is expected to take place in the first half of next year at the earliest.

A Twosome Place, wholly owned by Anchor Equity, is estimated to be worth over 500 billion won ($445 million), slightly above the 450 billion won valuation when the Hong Kong-based private equity firm bought an additional 45% stake with management rights in 2019.

Anchor Equity acquired 100% of the coffee chain from CJ Foodville Co. between 2018 and 2020, which had shed non-core assets to improve its balance sheet. CJ Foodville also has been attempting to sell its bakery chain Tous Les Jours since 2019, for which the Carlyle Group walked away from acquisition talks earlier this year.

Despite the reduced number of customers in the pandemic situation, operating profit at A Twosome Place increased 8.7% to 38.8 billion won in 2020 from a year earlier, with sales up 10.3% to 365.4 billion won. Its earnings are expected to pick up with the rollout of the COVID-19 vaccines.

Its IPO is expected to prompt other Korean coffee chains to follow suit. Earlier this year Ediya Coffee, another franchise operator, also expressed its intent to go public. 

In September last year, Seoul-based IMM Private Equity sold South Korea-based Hollys Coffee to the country’s chemical-to steel-focused KG Group, in its third attempt to exit from its 82 billion won investment in the coffee house chain.

Another Korean coffee franchise The Coffee Bean & Tea Leaf has been up for sale by Jollibee Foods Corp., a fast-food giant in the Philippines, which acquired the coffee chain for $350 million in 2019.

Write to Jin-seong Kim at jskim1028@hankyung.com
Yeonhee Kim edited this article.