Private equity firm TA Associates is preparing a potential sale of bubble tea operator Gong Cha, with the process expected to attract interest from several buyout and growth investors, according to a report by Reuters citing unnamed sources familiar with the matter.
The Boston-based investor has mandated JPMorgan Chase to run the auction process, with preliminary indications suggesting a valuation of up to $2bn. Binding bids are expected to be submitted by mid-June, the sources said.
Among the parties understood to be evaluating the opportunity are Bain Capital and General Atlantic, alongside other financial sponsors exploring exposure to the fast-growing global beverage franchise sector.
Gong Cha, which generates more than $70m in annual EBITDA, would be valued at close to 30x earnings at the top end of expectations, although sources noted that bidders are likely to anchor at lower valuation multiples given current market conditions.
Founded in Taiwan in 2006, Gong Cha has expanded into one of the world’s largest bubble tea brands, operating through a mix of franchised and company-owned stores. The business now spans roughly 2,200 outlets across 32 markets, including Asia, North America, Europe and the Middle East.
Revenue reached approximately $217m last year, representing 14% year-on-year growth, supported by strong performance in Japan and South Korea and continued international expansion. The company also entered five new markets over the period, including Thailand, Colombia and Ecuador, and expanded its US footprint through acquisitions of master franchise rights on both coasts.
TA Associates acquired a stake in Gong Cha in 2019 and has since overseen a period of international scaling and franchise consolidation.
Neither TA Associates, Gong Cha, Bain Capital, General Atlantic nor JPMorgan commented on the process.
