This article was published on Feb. 11, 2025, at 4:43 p.m. on the ChosunBiz MoneyMove site.
Domestic private equity fund operator UCK Partners is reviewing the recapitalization of acquisition financing for 'Sulbing.' Given that the benchmark interest rate has decreased since the initial borrowing of the acquisition financing, it appears they aim to lower borrowing costs and conduct interim dividends for limited partners (LPs) through the recapitalization.
On the 11th, according to the investment banking industry, UCK Partners is negotiating with multiple securities firms regarding the acquisition financing recapitalization for Sulbing. This recapitalization is said to be progressing as several securities firms have made proposals to UCK Partners. The scale of the recapitalization is expected to be around 80 billion won, including senior term loans and revolving credit facilities, with interest rates likely to be set in the mid-to-high 5% range.
In 2023, UCK Partners acquired 90% of Sulbing's management rights. They invested a total of 130.5 billion won, including 60 billion won from a blind fund and 70.5 billion won from acquisition financing. The fact that the current recapitalization scale exceeds the previous acquisition financing amount indicates they are likely seeking to increase their borrowing fund to provide interim dividends to fund LPs.
Sulbing is a bingsu franchise company established in South Korea in 2013, currently operating approximately 600 stores nationwide.
Since UCK Partners acquired Sulbing, the company has seen strong performance. In 2023, Sulbing's sales were 26.1 billion won, and operating profit was 10.9 billion won, representing increases of 2.3% and 10.5%, respectively, compared to the previous year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) also increased from 10.5 billion won in 2022 to 11.4 billion won in 2023. Sales in 2024 are expected to grow by over 10% compared to the previous year.
UCK Partners is advancing efforts to enhance Sulbing's corporate value by recruiting Kim Ui-yeol as the new chief executive officer (CEO). Last year, they established a new overseas business head position and appointed an executive from KYOCHON F&B to accelerate their global operations. UCK Partners previously transferred Gongcha to the overseas market, achieving profits that are five times the initial investment.
UCK Partners is expected to select an underwriter soon after discussions with domestic securities firms. An industry official noted that "nothing has been finalized regarding UCK Partners' recapitalization of the acquisition financing for Sulbing" and that "various underwriters are currently making proposals to UCK Partners."