이 기사는 2020년 01월 22일 08시00분 thebell에 표출된 기사입니다

South Korea’s National Pension Service (NPS), the third largest pension fund in the world, is considering investing in a buyout deal in the food and service sector.

The NPS is set to decide whether to commit capital to a fund formed by private equity firm KL&Partners that will be the new owner of Haimarrow Food Service, the operator of the country’s famous fast-food chain Mom’s Touch, sources familiar with the matter said on January 17.

KL&Partners, which signed a deal to buy a controlling stake in Haimarrow Food Service last month, has tapped several institutional investors – including the NPS – to fund the acquisition cost.

Late last month, the Seoul-based private equity firm secured a financing commitment of 50 billion won ($42 million) – about a quarter of 197.2 billion won ($169 million) that it will pay for the 56.8 percent of the burger franchise operator – from Korean Federation of Community Credit Cooperatives (KFCC), another major institutional investor in the country. The NPS was reportedly offered to commit a slightly greater amount than KFCC.

The NPS’ decision, expected to be made later this month, would draw keen attention, as it may have a large influence on a final decision made by other domestic institutional investors. It is, however, uncertain whether the NPS will participate as an anchor investor in a project-specific fund of a relatively young private equity firm to invest in a food business, because there have been no such cases before. The target company’s labor union, which is opposing the sale, also could weigh on the public pension fund's decision.

“The NPS is likely to make a cautious decision, as we previously saw almost zero cases of the NPS committing capital to finance a buyout deal by a young private equity firm in the food and beverage sector,” said an industry insider.

“The NPS decision could have an impact on a final decision made by other institutional investors,” said another industry insider.

KL&Partners is seen to fund up to half of the acquisition cost in acquisition financing arranged by Shinhan Investment, and Haimarrow Chairman Chung Hyun-sik also plans to invest some of the proceeds from the sale back in the fund. The remaining amount needs to be financed through commitments from potential limited partners, which is why the NPS’ investment decision is all the more important for KL&Partners.

The private equity firm signed a share purchase agreement with Haimarrow on December 27. Exclusive negotiation rights granted to KL&Partners will expire in April.

Haimarrow announced last Thursday that it will hold a special shareholders meeting on January 31 to vote on the appointment of board members. The company has included one of the senior officials from KL&Partners in the nomination while the acquisition transaction has not yet closed.

(By reporter Rho Ar-rum)