KFC, Pizza Hut owner Yum Brands and Goldman Sachs’ PIA bid to acquire Korea’s Mom's Touch

Mom’s Touch, a chicken burger chain based in South Korea, is up for sale and many companies are interested. Bidders are placing their bids, and in the latest update, a lot of international private equity firms also joined in the bidding war for its acquisition.

Pizza Hut, KFC and Taco Bell’s owner Yum! Brands and private equity fund Goldman Sach’s Principal Investment Area (PIA) have reportedly submitted their respective bids for Mom’s Touch. As per The Korea Times, sources in the investment banking sector said on Monday, Nov. 28, that Pacific Alliance Group (PAG), a Hong Kong-headquartered investment management company, also placed its bid.

Mom’s Touch is currently owned by KL & Partners, a local PEF firm, and it appears that bidding for its acquisition is going to be tight as many more companies are joining the bid. Business observers said that part of the reason why many foreign firms are submitting their bids is their favorable positions brought about by the strong U.S. dollar.

It was added that other potential buyers are likely to surface at any time and participate in the bidding as the sales process is being carried out on a rolling basis right now. This means that rather than wait for a particular date to check them all at once, the applications for the acquisition are now being reviewed as they come in.

It was in June when Mom’s Touch revealed it was selling its business. The company started searching for a new owner after it was delisted from Kosdaq in that same month. Industry experts said that after the delisting, the sell-off talks are likely to gain momentum.

“Listed companies have legal obligations such as disclosure of financial statements and information to the public, which sometimes delay sell-off talks,” Sejong University’s business administration professor, Kim Dae Jong, commented at that time.

In any case, Goldman Sachs' PIA has already made a few investments in South Korea, such as in Baemin food delivery and Zigbang real estate platform, and both investments are successful so far. As for Yum! Brands, its KFC and Pizza Hut franchises in the country are active and adding Mom’s Touch to its portfolio will expand its offering and number of customers.

Mom’s Touch has an estimated corporate value of about KRW1 trillion or $804 million. This is said to be nearly three times the amount that the brand’s largest stakeholder, Korea F&B Holdings, had invested in 2019 for the stake purchase.