VIG buys Korean healthy beverage brand
VIG Partners has agreed to acquire a majority stake in Teazen, a South Korean producer of tea-based health drinks, for approximately USD 70m.
It is the sixth investment from the firm’s fourth flagship fund, which closed on USD 850m in late 2019 and targets companies with enterprise valuations of USD 70m to USD 500m.
Other portfolio companies include waste-to-energy facility operator BioEnergyFarmAsan, logistics platform Fassto, personal care products maker The Skin Factory, funeral services provider Preed Life, and English language education service D.Share.
The Teazen acquisition facilitates an exit for IBK-TS Private Equity Fund, a 2017 vintage vehicle established by IBK Capital and TS Investment, which holds 70% of the company. In addition, CEO Jong-tae Kim and related parties will sell half their 30% interest to VIG.
Kim established Teazen in 2000, having previously worked on Amorepacific’s tea brand O’sulloc. The company has expanded its product portfolio from traditional tea drinks into the health beverage space. The health drink portfolio features organic barley sprout powder, grapefruit green tea, energy tea, and teas designed to aid sleep.
The company sources raw materials from a 200,000-square-metre self-run organic team farm and manufactures products at its own plant. Sales reached USD 34m in 2021, up 100% year-on-year.
Teazen achieved a world-first in 2019 by commercialising powder-based kombucha products through freeze-drying technology. Kombucha, a probiotic drink with a sweet and sour taste made by adding beneficial bacteria to fermented green tea or black tea, has gained an international following. It is low in calories and contains live lactic acid bacteria.
“Given that the company has established solid brand power, we plan to aggressively expand its business into tea-based functional food industry in the future,” said Chulmin Lee, a managing partner at VIG, in a statement. “The biggest investment highlight of this transaction is being able to establish a partnership with CEO Jong-tae Kim, a pioneer in the Korean tea market”.
VIG’s post-acquisition value creation plans include recruiting additional professional management talent and expanding Teazen’s customer reach.
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