The Price Is Right For Bd’s Mongolian

A “reasonable” multiple and underpenetrated segment mean growth for bd’s Mongolian Grill.

Chain Leader:

Kinderhook Industries, a New York private-equity firm, acquired the assets of bd’s Mongolian Grill, a 30-unit chain headquartered in Ferndale, Mich., in May. We recently caught up with new bd’s Chairman Clyde Culp, an industry veteran who arranged the deal, and grilled him about financial trends at the stir-fry concept.

Can you share the size of the bd’s Mongolian Grill deal?
Without going into detail, I would say it was a reasonable multiple of EBITDA, and by reasonable, I mean in the 5 times to 6 times range. The world of reason is returning to multiples.

Meaning?
In the last several years, average multiples were in the 7 times to 8 times range. Some went as high as double digits with equity buyers, who liked the stability of cash flow in this industry. Leverage was so available to them that they could afford to pay more. That’s unusual for private transactions.

How has management been changed? Read on.