[THE INVESTOR] Korean coffee franchise Ediya Coffee announced on Dec. 18 that it has selected Mirae Asset Daewoo as the manager for its upcoming initial public offering.
The company aims to go public during the second half of next year and will be listed on the benchmark KOSPI, instead of secondary bourse KOSDAQ.
The company, which focuses mostly on small shops with low-cost coffee, has been successful as it targets a niche market as compared to coffee chains like Starbucks and A Twosome Place. Its sales last year reached 153.5 billion won (US$140.66 million) with operating profit of 15.7 billion won. Industry sources expect its market cap to be around 200 billion won, based on companies posting similar sales such as a local hamburger franchise operator Haimarrow Food Service.
The company has also signed a contract to acquire a factory site for 6.4 billion won from printer ink producer Inktek to establish its coffee roasting plant. It hopes to finance the new factory in Pyeongtaek, Gyeonggi Province, with proceeds from the IPO. It has already paid a deposit of 1.28 billion won and will pay the rest by Dec. 27.
“By going public and establishing our own roasting factory, we will work hard to increase the satisfaction of customers and franchisees,” Ediya Coffee CEO Moon Chag-gi said in a statement.
Moreover, the company plans to inject some of the IPO funds for expanding overseas.
“We plan to fund our new factory first. Entering the overseas markets is one of the long-term plans that we are considering,” a Ediya Coffee spokesperson told The Investor.
Ediya Coffee was established in 2001 and currently has the most number of coffee shops in Korea at 2,071 as of end-October.
By Song Seung-hyun(firstname.lastname@example.org)