The sale of restaurant kitchen equipment supplier Ohjin Corporation has been put on hold as its private equity owners struggle to find a buyer amid unfavorable business conditions.

The private equity unit of NH Investment & Securities, LB Private Equity and H&CK Partners, which together hold 100% of the South Korean company, made the decision to postpone the sale process, industry sources said.

They began sounding out potential buyers earlier this year, before entering into advanced talks on the sale with a consortium of SKS Private Equity and Daishin Private Equity in the spring. However, the consortium eventually decided to pull out due to the high price tag.

Samjong KPMG was hired in July to run an auction process for the company, but it hit a snag when the Ministry of Food and Drug Safety recently started clamping down on kitchen equipment suppliers that import food equipment without making declarations. Since this is not an issue that is specific to Ohjin, but is considered common practice in the industry, some industry watchers expect that the company’s value will not be negatively impacted.

The private equity owners are reportedly not in a hurry to sell Ohjin Corporation, because they recovered most of their investment through dividend payments during the past four years. They acquired the company for 40 billion won ($36.4 million) in 2015.

Founded in 1978, Ohjin supplies and maintains kitchen equipment, such as coffee machines, ovens and ice makers, for major coffee chains including Starbucks, Ediya and Hollys Coffee. Its customers also include restaurant chains like Pizza Hut and McDonalds, as well as large companies such as Hanwha Hotels & Resorts and CJ Foodville.

The company’s stable cashflows could attract interest from potential buyers, industry watchers said. Ohjin is also in a strong financial position, with no long-term debt and 9.8 billion won in cash and cash equivalents at the end of 2019.

It recorded 21.9 billion won in revenue and operating income of 4.2 billion won in 2019. Earnings before interest, tax, depreciation and amortization amounted to 4.4 billion won in the same period. (Reporting by Hye-ran Kim)