TheBorn Korea eyes M&As, overseas expansion after $73.7 million IPO

TheBorn Korea Inc., a leading South Korean food and beverage group operated by TV celebrity and chef Paik Jong-won, is looking to acquire soy sauce companies and expand its overseas business once its 102 billion won ($73.7 million) initial public offering is completed.

While unveiling the company’s business strategy at a media briefing on Monday, the chief executive said more than 90% of the funds raised through the IPO will be used to buy or invest in shares of retail food and food tech companies, to expand its food distribution business, including the home meal replacement (HMR) business.

"One of the main reasons for our IPO is the distribution business, which we are actively investing and interested in,” he told reporters. “In Korea, we’ll explore various distribution channels, including meal kits and sauces.”

He said the company is especially interested in acquiring sauce companies to create synergy with its franchise business.

TheBorn Korea earlier said its businesses are similar to those of major domestic food suppliers such as CJ Seafood Corp., Daesang Corp. and Shinsegae Food Inc., indicating its goal of becoming a comprehensive food company.

IPO SCHEDULE

After a two-day public subscription period ending this Tuesday, TheBorn Korea will go public on Nov. 6.

On the first retail subscription day on Monday, about 240,000 individual investors subscribed to the IPO with some 500 billion won in deposits, representing a 32 to 1 competition ratio.

Competition among institutional investors was so intense during the bookbuilding last week that the IPO price was set at 34,000 won each, 21% higher than the indicative range of 23,000 won to 28,000 won.

Korea Investment & Securities Co. and NH Investment & Securities are the lead managers of the IPO.

TheBorn Korea plans to float 2,845,200 new shares on the main Kospi bourse, which account for 19.67% of its total outstanding shares.

The company expects to raise 102 billion won through the IPO, with its market capitalization estimated at 491.8 billion won.

The company is relaunching its IPO after it withdrew its plan in 2018 amid tepid investor interest in the domestic food and beverage industry.

HEAVY RELIANCE ON PAIK

TheBorn Korea relies heavily on Paik (also spelled Baek Jong-won in local media), and like to call him the “Gordon Ramsay of South Korea.”

A famous restaurateur and the main host of the popular TV series Baek Jong-won’s Alley Restaurant, he produced his own original series, Paik’s Spirit, with the world’s top streaming service Netflix Inc. in 2021.

Founded in 1994, TheBorn Korea now operates 25 restaurant and café brands across domestic and global markets, including Bornga, Saemaeul Restaurant, Paik’s Bibim, Hanshin Pocha and café franchise Paik’s Coffee. It also operates Hotel TheBorn Jeju on Korea's southern resort island of Jeju.

Paik, founder and chief executive of TheBorn Korea, owns a 76.69% stake in the company as of the end of 2023, followed by Vice President Kang Seok-won, who holds a 21.09% stake.

The food and beverage chain operator posted 25.6 billion won in operating profit in 2023, down 0.6% from the previous year. Its sales rose 45.5% on-year to 410.7 billion won last year. Net profit grew 31% to 20.9 billion won.

In the first half of this year, the company’s domestic sales reached 209 billion won, accounting for nearly 99% of its entire sales.

The franchise business is its primary revenue source, constituting 177.1 billion won, or 84% of total sales.

Write to Seok-Cheol Choi at dolsoi@hankyung.com
In-Soo Nam edited this article.