SkyLake poised to sell Outback Steakhouse Korea to BHC

An Outback Steakhouse restaurant in Pohang, North Gyeongsang Province / Korea Times file

By Park Jae-hyuk

BHC Group, which owns the nation's second-largest fried chicken franchise, is expected to acquire Outback Steakhouse Korea from SkyLake Equity Partners.

According to industry sources and media reports, Wednesday, BHC outbid a consortium of Daishin Private Equity and Yuanta Investment last month. SkyLake is also said to have recognized BHC for its experience with running multiple restaurant franchises.

It seems the seller will choose BHC as the preferred bidder in the near future, although a BHC spokesman said the company has yet to be informed about this. Daishin, meanwhile, kept a low profile. SkyLake and the deal's underwriter, Credit Suisse, were unavailable for comment.

BHC has expressed its willingness to acquire Outback with the intention of becoming a company specializing in meat dishes. It also has enough cash, thanks to large-scale investments from MBK Partners and the Ontario Teachers' Pension Plan.

If BHC's acquisition of Outback is successful, SkyLake will be able to make a successful divestment from the restaurant franchise business, which is considered to be tough for most private equity firms in the domestic capital market. Its previous attempt to sell Outback ended in failure last year, although it drew attention from several bidders, including Bain Capital.

SkyLake took over an entire stake in Outback's Korean operation for 57 billion won ($50 million) in 2016. The valuation of its stake is estimated at 250 billion won at this moment, because the franchise has shown earnings growth, despite the slowdown in the restaurant industry amid the COVID-19 pandemic.