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| A Hollys Coffee shop in Seoul / Newsis |
Hollys plans to become first local coffee franchise to achieve IPO
By Anna J. Park
Hollys Coffee's franchiser KG Hollys F&B has recently initiated procedures to go public, sending a request for proposal (RFP) earlier this month to major securities firms known for expertise in managing initial public offerings (IPOs).
According to the investment banking industry, the firm will soon host presentation bids to appoint the main underwriters of the public offering process.
Once the underwriters are selected, a series of procedures, ranging from due diligence, corporate valuation assessment and submission of a preliminary IPO review to the Korea Exchange (KRX) will follow over the next months.
It is largely expected that the IPO of Hollys Coffee will be completed next year in line with the firm's original timeline set for 2024.
"Until the end of 2024, I will extend our businesses horizontally and vertically to achieve the IPO goal," Lee Jong-hyun, CEO of KG Hollys F&B, said when he took office in November 2021.
Steps towards the IPO goal have been facilitated by the coffee franchise's recent earnings growth. The company posted a revenue of 71.5 billion won ($53.7 million) with a net profit of 3.9 billion won during the first half of this year ― 11 percent and 39 percent jumps, respectively.
KG Group acquired a 93.8 percent stake in Hollys at 145 billion won from IMM Private Equity through a special purpose company (SPC) in 2020. It holds a 74.3 percent stake as of the end of 2022. KB Hollys F&B aims at a 400 billion won to 500 billion won valuation for the coffee business.
If the IPO bid is successful, it will be the first direct listing by a local food and beverage franchise business since the IPO of Kyochon Chicken in November 2020. It will also be the first IPO by a local coffee franchise business in the country.
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