Fried chicken chain BHC to pay $255 mn for Outback Steakhouse Korea

South Korea’s No. 2 fried chicken brand BHC Group is set to spend $255 million to acquire the Korean operations of Outback Steakhouse, an Australian-themed American dining restaurant chain. The takeover is expected to help BHC to expand its business portfolio for future growth.

Seoul-based private equity firm SkyLake Equity Partners, the largest shareholder of Outback Steakhouse Korea, signed a share purchase agreement (SPA) on Sept. 17 to sell a 100% stake in the restaurant chain to BHC at 300 billion won ($254.5 million), according to investment banking industry sources.

The deal, which Credit Suisse handled, is to be concluded around end-October.

BHC has been expanding its business portfolio by acquiring other restaurant chains, but none of them enjoy as much brand recognition as BHC’s fried chicken franchise, according to the domestic food and beverage industry sources. So, the acquisition of Outback Steakhouse Korea will provide the much-needed synergy for BHC, the sources said.

Outback Steakhouse Korea is forecast to report record earnings for this year as its preliminary operating profit nearly tripled to 22.4 billion won in the first half from 7.7 billion won a year earlier with sales up 34.6% to 175 billion won.

With the sale, SkyLake is set to pocket about sixfold its investment of 57 billion won in five years. Outback Steakhouse Korea has been considered as an example showing a domestic private equity fund firm enhanced values of a company it invested in.

SkyLake earlier this year sold a transformer manufacturer KOC Electric Co. and a testing and certification company KCTL. LB PE acquired KOC Electric, while European laboratories and diagnostics company Eurofins took over KCTL.

Write to Chae-Yeon Kim at why29@hankyung.com
Jongwoo Cheon edited this article.