A consortium of Q Capital Partners and Corstone Asia will acquire Norang Food Co Ltd, which operates South Korean fried chicken chain Norang Tongdak, for 70 billion won ($60 million).

The consortium signed a share purchase agreement to acquire a 100% in Norang Food on September 18, industry sources said. The deal, which is structured to consist of acquisition financing and equity and mezzanine loan tranches, is likely to be closed in October.

The consortium plans to establish a special purpose company and finance approximately 43% of the total acquisition price. Yuanta Securities will arrange acquisition financing. Total borrowing will amount to 33 billion won, including a revolving credit facility.

Corstone Asia will invest 15 billion won in mezzanine loans and 10 billion won in equity investments. Q Capital Partners will inject 15 billion won in equity investments. The two firms will adjust voting rights attached to mezzanine loans so that each firm will equally have a 50% stake in the SPC.

Norang Food, founded in 2009, has increased the number of its fried chicken franchise stores nationwide to more than 430 over the past 10 years. Revenue also rose more than threefold to 50.2 billion won in 2019 from 15 billion won in 2017.

Norang Food reportedly recorded earnings of about 8 billion won before interest, tax, depreciation and amortization. Norang Tongdak has built a brand image as “good” fried chicken with a relatively low sodium content, which contributed to the chain’s rapid growth.

Q Capital Partners reportedly sourced the deal first and asked Corstone Asia to participate. Both Q Capital Partners and Corstone Asia are actively investing in mid-cap buyout deals.

The firms are is expected to make investments through their own blind-pool funds and carry out value-up strategy to create synergies. (Reporting by Hye-ran Kim)