Jubilant Foodworks’ Acquisition Plans: Expanding Stake in DP Eurasia
Jubilant Foodworks Ltd has unveiled its intentions to increase its stake in DP Eurasia NV, the exclusive master franchisee of the Domino’s Pizza brand in Turkey, Azerbaijan, and Georgia. This strategic move underscores the company’s commitment to expanding its presence in key markets and strengthening its foothold in the rapidly growing pizza delivery segment.
Acquisition Details
Jubilant Foodworks plans to acquire an additional 51.16 per cent stake in DP Eurasia NV through its subsidiary, with a consideration of up to EUR 73.36 million (approximately Rs 670 crore). Currently, Jubilant Foodworks Netherlands B.V (JFN), the company’s wholly-owned arm, holds 48.84 per cent ordinary shares of DP Eurasia, positioning it as a significant shareholder in the largest pizza delivery company in Turkey.
Acquisition Strategy
The proposed acquisition will involve purchasing the entire issued and outstanding ordinary share capital of DP Eurasia NV not already held by JFN. The acquisition price is set at up to 85 pence per share, with the aggregate purchase consideration amounting to EUR 73.36 million, to be settled in cash.
Business Overview
DP Eurasia, along with its subsidiaries, operates a network of 694 stores across Turkey, Azerbaijan, and Georgia, offering pizza delivery and takeaway/eat-in facilities. The company follows an asset-light, scalable business model through franchised stores, with franchised outlets contributing 88 per cent to the overall store count.
Market Presence and Diversification
As the largest pizza delivery company in Turkey, DP Eurasia commands a significant market share in the region. Beyond its core pizza business, the company also operates its coffee brand, COFFY, with 67 stores as of the latest period-end, majority of which are franchised outlets. This diversification strategy enhances DP Eurasia’s revenue streams and strengthens its position in the foodservice industry.
Financing the Acquisition
To fund the acquisition, JFN will utilize a combination of existing term-loan facility availed from HSBC, backed by a corporate guarantee issued by Jubilant Foodworks Ltd, and a new long-term facility from HSBC. Jubilant Foodworks Ltd will extend its guarantee to cover the repayment obligations of JFN towards HSBC, further demonstrating its commitment to facilitating the acquisition process.
Forward Strategy
Jubilant Foodworks’ move to increase its stake in DP Eurasia aligns with its broader strategic objectives of geographic expansion and portfolio diversification. By leveraging DP Eurasia’s strong market presence and brand equity, Jubilant Foodworks aims to drive sustainable growth and deliver value to its stakeholders in the dynamic foodservice industry.
