A Burger King fast food restaurant is pictured in Tokyo, Japan September 26, 2017. REUTERS/Kim Kyung-Hoon

Hong Kong, Jan 18 (Reuters) – Private equity firm Affinity Equity Partners is starting the sale of its Burger King fast food businesses in South Korea and Japan this week in a deal that could yield more of a billion dollars, a person with knowledge of the case told Reuters.

Hong Kong-based Affinity has appointed Goldman Sachs to lead the sale, which targets both private equity investors and strategic buyers, said the person, who declined to be identified because the information is confidential.

The bank declined to comment.

Affinity bought full control of Burger King South Korea in 2016 for around $170 million and a year later acquired the American fast-food brand’s Japanese franchise.

The South Korean company reported revenue of 680 billion won ($572 million) in 2021, with adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of 80 billion won ($67 million). dollars), the person said, adding its adjusted EBITDA in 2022 is expected to reach 100 billion won.

Burger King Japan’s adjusted EBITDA in 2021 was 700 million yen ($6 million), the person said.

Global fast food chains such as McDonald’s and Yum! Brands are trading at 20 to 30 times their EBITDA, according to data from Refinitiv Eikon. Burger King India (BURG.NS) trades at around 25 times its EBITDA.

Affinity and Burger King Japan did not immediately respond to a request for comment.

An official from BKR Corporation, the operator of Burger King in South Korea, declined to comment.

The Nikkei business daily reported the sale for the first time on Monday.

This comes as the consumer and retail sector faces huge challenges and disruptions caused by the coronavirus pandemic.

In South Korea, businesses have adapted by relying more on delivery, which has led to exponential growth in its food delivery apps.

Burger King Korea said on Monday that the number of monthly active users on its mobile app in December exceeded 1.4 million, the highest since the app launched in May 2016.

Since acquiring Affinity, Burger King has been in expansion mode in South Korea and Japan.

Burger King operates 440 outlets in South Korea, more than rival McDonald’s.

The Japanese franchise announced Monday that it will open three new outlets in January, bringing the total to 149, with plans to open more “aggressively” in 2022.

($1 = 114.4800 yen)

Reporting by Kane Wu in Hong Kong, additional reporting by Sam Nussey and Rocky Swfit in Tokyo and Joyce Lee in Seoul, editing by Louise Heavens

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