[THE INVESTOR] The nation’s sluggish mergers and acquisitions market is heating up, with several food and coffee franchises being put up on the block recently.

Starting the shopping spree was leading buyout fund VIG Partners’ sell-off of Burger King Korea to a Hong Kong-based private equity fund.

More recently, Hollys F&B is pushing to sell its specialty coffee chain Hollys Coffee, drawing interest from several foreign investors.

According to the sources, lead manager Deutsche Securities Korea plans to receive preliminary bids for Hollys F&B on Aug. 18 from prospective buyers. About 10 domestic and foreign investors have reportedly expressed interest.

Local buyout fund IMM Private Equity, which runs Hollys F&B, is slated to short-list five qualified bidders and allow them to conduct due diligence before soliciting formal bids at the end of September.

On top of Hollys F&C, competition is intensifying for the Korean unit of U.S. fast food chain McDonald’s. In late June, CJ Group, a South Korean food and entertainment conglomerate, joined the race to vie with two local prospective buyers.

McDonald’s, which directly manages about 400 stores in South Korea, has been looking for local partners to run them as franchise stores that pay annual commissions instead.

Market watchers said the brisk M&A activity in the food franchise market stems from the fact that the industry is not sensitive to business cycles and can generate a stable flow of cash.

(theinvestor@heraldcorp.com)