Japan's J-Star acquires Pepper Lunch

Pepper Lunch operates a quick-service model where selected steak meat is cooked in front of customers. It has 514 locations in total, with 181 in Japan and 333 overseas, with a strong market presence in food courts. There is a significant footprint in Southeast Asia.

In addition to its flagship brand, Pepper Lunch operates various locations as Pepper Lunch Diner, 92's, Charcoal-Grilled Hamburger Steak KUNI, Tokyo 634 Berg, Musashi Hamburg, and CAB Steak. J-Star plans to support an expansion both within Japan and globally, with an emphasis on Asia.

J-Star invested via its fourth middle-market fund, which closed last year at the hard cap of JPY48.5 billion ($450 million) and typically deploys in a range of JPY1-3 billion.

The firm expects to leverage significant experience in the restaurant space. This includes the acquisition of Section Eight, which operates casual dining chain Aiseki-ya and standing bar chain The Public Stand. Both brands target a young, unmarried clientele by providing an environment for mingling. J-Star has also backed Echigoya, an operator of izakaya gastropubs and a separate fast-casual chain called Shinpachi Shokudo.

Quick-service restaurants have remained a consistent theme in private equity due to their potential for fast, cash-generative expansions and a strong connection to Asia's broader themes around growing consumerism. Success relies on an ability to adapt and cater to local tastes and, increasingly, adopt new technologies to automate logistical processes and streamline the customer experience. COVID-19 has added to these challenges by requiring owners to rebuild consumer confidence in brick-and-mortar models.

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• Topics
• North America
• Consumer
• Buyouts
• Japan
• J-Star