Key facts
- Bain Capital is acquiring the Taiwan-originated bubble tea chain Gong Cha.
- The sale is from TA Associates for over $635 million.
- The deal is expected to value Gong Cha at up to $2 billion.
- Gong Cha operates nearly 2,200 outlets in 32 countries.
- The company reported $217 million in revenue last year, a 14% increase.
- TA Associates first invested in Gong Cha in 2019.
Bain Capital has agreed to acquire the Taiwan-originated bubble tea chain Gong Cha from TA Associates for more than $635 million, according to sources familiar with the matter. The deal, managed by JPMorgan, is expected to value the global tea empire at up to $2 billion, reflecting a multiple approaching 30 times its annual earnings before interest, tax, depreciation, and amortization (EBITDA) of over $70 million.
Gong Cha, founded in Taiwan in 2006, has expanded to nearly 2,200 outlets across 32 countries. Last year, the company's revenue increased by 14% to $217 million, driven by strong performance in markets like Japan and South Korea, and strategic expansion into new territories including Thailand, Colombia, and Ecuador, as well as acquisitions of master franchisees in the United States.
TA Associates, which invested in Gong Cha in 2019, is seeking a significant exit. Other private equity firms, including General Atlantic and MBK Partners, were reportedly also vying for the acquisition. The valuation sought by TA Associates may present a point of negotiation, as buyers are reportedly leaning towards lower multiples given recent market recalibrations for consumer franchise businesses.
The investment thesis for firms like Bain Capital hinges on Gong Cha's continued unit expansion and market penetration, particularly in emerging markets. The brand's established global network and appeal within the specialty tea segment position it as an attractive target for private equity seeking exposure to resilient consumer categories.