Five months after hitting the market
H&Q Partners selected as preferred bidder
Five Guys, the American burger brand first introduced to Korea by Kim Dong-sun, Executive Vice President of Hanwha Galleria and third-generation owner of Hanwha Group, is being sold to a private equity fund (PEF). This comes five months after it was put up for sale on the market.
According to the Financial Supervisory Service’s electronic disclosure system on December 17, Hanwha Galleria announced that it had signed a memorandum of understanding (MOU) with H&Q Equity Partners regarding the sale of shares. Following the signing of this MOU, the two parties plan to proceed with due diligence and then sign a final contract. However, specific details such as the transaction amount have not yet been determined.
Five Guys was first brought to Korea in June 2023 by Executive Vice President Kim, the third son of Hanwha Chairman Kim Seung-youn. As Kim’s first new business venture, it attracted significant attention and continued to expand its presence, increasing both the number of stores and sales. Last year, Five Guys recorded sales of 46.5 billion won, a 365% increase from the previous year, and achieved an operating profit of 3.4 billion won, turning a profit for the first time.
Industry insiders note that the speed of this sale is relatively fast compared to typical food and beverage (F&B) sector transactions. Previously, in July, Hanwha Galleria distributed an investment teaser letter for the sale of its Five Guys stake. Within five months, a preferred bidder was selected. According to investment banking sources, the expected sale price for Five Guys Korea is estimated to be at least 60 billion won. An industry official commented, “Recently, many F&B businesses have been put up for sale in the M&A market, but the Five Guys deal has proceeded at a notably rapid pace. The company is being valued at more than twice its book value.”
The proceeds from the sale of Five Guys are expected to be used to strengthen Hanwha Galleria’s core business competitiveness, such as funding the reconstruction of the Apgujeong Galleria Department Store.
A Hanwha Galleria representative stated, “After distributing the teaser letter, many companies and investors expressed strong interest. We selected H&Q as the preferred bidder because they highly valued the performance and future growth potential of Five Guys Korea and demonstrated a strong commitment to the business,” adding, “Specific details will be discussed further as we proceed with due diligence and the main procedures.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
