A consortium led by South Korean fried chicken franchise Pelicana last week completed a deal to buy MP Group, the owner of homegrown pizza chain Mr. Pizza and coffee chain Manoffin, paving the way for Pelicana to make an inroad into the country’s pizza franchise market.

According to multiple sources from the investment bank industry last week, Ulmus-TRI Restructuring Investment Association No. 1 – a project fund created by Ulmus Investment and TR Investment to acquire MP Group – has made the final payment on its acquisition of MP Group on Nov. 16.

The fund already paid 10 billion won ($9 million) to buy MP Group in the end of September and another 5 billion won in the end of October before the final payment.

The investment association will buy new shares that will be issued by MP Group in two tranches later to secure about 50 percent stakes in MP Group, a move that is expected to allow a major fried chicken franchise Pelicana to have full management control over the pizza chain operator later.

Pelicana and Shinjung are anchor investors of the acquisition fund with about 70 percent share in total, while other domestic capital firms hold the rest.

An unnamed market official expected that Pelicana will eventually take over MP Group after Ulmus and TR Investment normalize the business of MP Group.

MP Group – founded in 1990 – operates local pizza franchise Mr. Pizza that open its first shop in the college street in Sinchon, northern Seoul, as well as coffee chain Manoffin. Mr. Pizza once outgrew its foreign rivals Pizza Hut and Papa Johns in Korea but it has fallen into crisis following power abuse scandals and arrest of its former chairman Chung Woo-hyun over embezzlement and breach of trust charges, promoting the Korea Exchange to review qualification of MP Group initial public offering (IPO). Since then, the company has been put up for grabs in the market while its stock trading has been suspended.

Pelicana, founded in 1982, is famous for its fried chicken, operating more than 1,100 outlets across Korea as of 2019.

By Kang Woo-seok and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]