It has been confirmed that London Bagel Museum, a famous domestic bakery brand, has been put up for sale. Although the company denies this, saying it is not a sale of management rights and is only a ‘simple investment attraction’, it is known that multiple strategic investors (SI) and financial investors (FI) have already received offers for the acquisition behind the scenes.
The London Bagel Museum is said to want a ransom of 300 billion won. A simple calculation based on operating profit shows that the EBITDA (operating profit before amortization) multiple is close to 24 times. Considering that the EBITDA multiple of the food and beverage (F&B) industry was only 14 to 15 times at its peak even in its heyday, the corporate value presented by the London Bagel Museum is too expensive.
According to the investment banking (IB) industry on the 26th, LBM, the operator of the London Bagel Museum, is exploring the possibility of selling management rights to some SIs and FIs.
Currently, LBM’s largest shareholder is director Lee Sang-yeop, who is known to own 51% of the shares. Director Kim Dong-jun (29%), Chief Brand Officer Lee Hyo-jeong (CBO, 15%), and current CEO Kang Kwan-gu (5%) are also major shareholders.
The sale structure and specific conditions are not known. However, the company’s desired corporate value is said to be in the 300 billion won range. The company recorded sales of 36 billion won and operating profit of 12.6 billion won last year. Although it is not accurate, an EBITDA multiple of 24 times must be applied to achieve a value of 300 billion won.
In the F&B industry, 24x EBITDA is an unprecedented multiple. In the case of Mom’s Touch, which is seeking to sell, a multiple of 9.5x was applied, and Burger King, which was said to be “too expensive” at the time of the sale, only applied a multiple of 12 to 13 times. EBITDA 6 times was applied to the price of KFC Korea, which was sold in January last year.
An official in the IB industry said, “The price of F&B companies is generally high in the United States, but even when business conditions were good, it did not exceed 14 to 15 times.” “Does that make sense?” he asked.
It is said that the recent departure of founders from the board of directors is also a factor in the reluctance to take over. Another official in the IB industry said, “Key members have resigned from their positions as directors, and it is questionable whether the people who remain on the board are the key people.”
Recently, it was reported that CBO Lee Hyo-jeong, who created the London Bagel Museum brand, Lee CBO’s husband, former CEO Lee Min-wook, and the largest shareholder, Director Lee Sang-yeop, resigned from the LBM board of directors. Currently, CEO Kang Kwan-gu, director Kim Dong-jun, the second largest shareholder, and Oh Seong-je, chief operating officer (COO), are on the board of directors.
Tags: London Bagel Museum sale worth billion won .. food beverage company
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