This article appeared on the ChosunBiz MoneyMove (MM) site at 5:45 p.m. Oct. 15, 2025.
Domestic private equity firm JKL Partners is conducting the sale of laundry specialist Cleantopia, and analysts say the secret to its sales growth is a change in its settlement structure. Based on improved results, Cleantopia's valuation has risen to 600 billion won.
According to the investment banking industry, PEF firm STIC Investments is conducting due diligence as the preferred bidder to acquire 100% equity in Cleantopia. JKL acquired 100% of Cleantopia's equity from former Cleantopia chairman Lee Beom-taek in 2021 for about 190 billion won.
Cleantopia's performance grew rapidly starting last year. Revenue, which was 79.5 billion won in 2021, rose to 85.2 billion won in 2022 and 96.5 billion won in 2023, then jumped to 279.6 billion won last year. Operating profit also recorded 4.1 billion won, 11.3 billion won and 11.9 billion won in the same periods, then surged to 31 billion won last year.
In last year's audit report, Cleantopia wrote that it "changed contract terms related to franchisees so that the party with rights and obligations related to laundry sales was shifted from the previous care centers (laundry branches) to Cleantopia headquarters. As a result, our revenue recognition criteria changed from 2024."
Before the change, care centers (laundry branches) managed each franchise, and the headquarters received a portion of consumer sales through the branches. Since last year, the structure changed so that the headquarters directly manages each franchise. The headquarters received royalties and laundry fees corresponding to sales from franchisees as payment.
Because the headquarters now first settles the amount excluding franchisee revenue and recognizes it as total revenue, then pays laundry costs to branches as outsourced service fees, total revenue inevitably increases. The flow of consumer payments changed from "franchisee → branch → headquarters" to "franchisee → headquarters."
However, because operating profit also increased, it is clear that Cleantopia's performance has improved.
Experts say the small and medium-sized enterprise suitability issue may be more important than performance. A source in the IB industry said, "Buyers will inevitably recognize the change in revenue recognition during due diligence," and noted, "From the buyer's perspective, the designation as a small and medium-sized enterprise suitable industry would be a bigger burden."
In June, the Korea Commission for Corporate Partnership recommended industrial laundry as a sector suitable for small and medium-sized enterprises. If Cleantopia's new growth area, laundry services for hospitals and nursing facilities, falls into that category, potential acquirers of Cleantopia could be limited. Large corporations are unlikely to pursue acquisitions given policy and public opinion risks. If acquired for 600 billion won and later resold, a sale price close to 1 trillion won would be expected, so the withdrawal of strategic investors could be painful.
A high price tag is also a burden. When Cleantopia was sold to JKL, it was valued at a multiple of 11.8 based on an EBITDA of 15.2 billion won. Based on last year's EBITDA of 36.5 billion won, the multiple rose to 16.4. Considering that multiples for the personal services sector typically range from 8 to 11, this is somewhat high.
However, because the buyer STIC Investments appears strongly committed to the acquisition, some expect the transaction to be completed smoothly. Another IB industry source said, "Skipping the main bid and STIC Investments securing the preferred bidder spot suggests it likely offered favorable terms."
Founded in 1992, Cleantopia is the No. 1 laundry franchise by number of franchises. It has more than 3,200 franchise locations nationwide. In addition to household laundry, it has expanded its business into specialized laundry markets such as medical, uniform and hotel linen.