JKL Partners Inc., a Seoul-based private equity firm, is set to acquire London Bagel Museum, a growing sensation in South Korea’s booming premium casual dining scene, for slightly over 200 billion won ($150 million).
JKL Partners is in final-stage negotiations to sign a share purchase agreement with LBM, the operator of the bagel franchise, people familiar with the matter said on Thursday.
JKL emerged as the frontrunner after the original favorite, Aeneas Private Equity, failed to secure timely funding despite offering a higher price, estimated at around 300 billion won, during initial bidding, sources said.
Since opening its first outlet near Seoul’s Anguk Station in 2021, the chain has earned a devoted fan base drawn to its chewy bagels, whimsical branding and Instagram-ready interiors.
In addition to the store’s distinctive British ambiance, its crunch, golden-brown bagel on the outside and chewy interior went viral among bagel enthusiasts, and the outlet has become a must-visit for both locals and tourists, according to industry officials.
With queues regularly spilling into the streets, London Bagel Museum recently added three new outlets in Seoul and another one on the country’s popular resort island of Jeju. London Bagel Museum also plans to expand into Japan and Singapore this year.
LBM said in February it attracted about 10 potential investors – both strategic and financial investors, including those from overseas – for the sale of the 100% stake.
Bank of America is the manager of the stake sale for LBM.
SMALL BUT PROFITABLE
LBM posted 24.2 billion won in operating profit on sales of 79.6 billion won last year.
Its 2024 earnings before interest, taxes, depreciation and amortization (EBITDA) were 26 billion won.
Besides London Bagel, LBM also operates other bakery franchises such as Artist Bakery, Café Layered and Café Highwaist.
The deal highlights a broader trend among private equity firms seeking exposure to “ownership brands” – small but highly influential consumer businesses shaped heavily by their founders’ vision.
Market watchers are paying close attention to how JKL would navigate the brand’s unique DNA, particularly given LBM’s strong founder-led identity.
Many customers associate the brand’s appeal with the founder’s aesthetic sensibility and curatorial eye, making post-acquisition continuity a potential challenge.
Sources said the shareholding agreement between JKL and LBM may include provisions for the founder and existing management to retain a minority stake or continue in a creative leadership role.
“The emotional equity that consumers place in brands like LBM is not easily replicated,” said a Seoul-based food and beverage investor.
Founded in 2001, JKL Partners has about 3.3 trillion won in assets under management, operating 10 PE funds and 21 portfolio companies.
By Da-Eun Choi
max@hankyung.com
In-Soo Nam edited this article.
