On Tuesday, Jubilant Foodworks Ltd announced its plans to acquire an additional 51.16% stake in DP Eurasia NV, the exclusive master franchisee of the Domino’s Pizza brand in Turkey, Azerbaijan, and Georgia.
The acquisition is set to take place via a subsidiary, with a suggested consideration of up to EUR 73.36 million (roughly INR 670 crore).
Jubilant Foodworks Netherlands B.V (JFN), a fully-owned subsidiary of the company, presently possesses 48.84% of the common shares of DP Eurasia, establishing itself as the foremost pizza delivery company in Turkey. The acquisition’s objective is to augment JFN’s ownership by acquiring all the currently outstanding ordinary share capital of DP Eurasia NV that is not already under its control. This transaction is proposed at a price of up to 85 pence per share from existing shareholders.
The total acquisition cost is fixed at around EUR 73.36 million, and the transaction is structured as an all-cash deal. DP Eurasia manages a significant enterprise, boasting 694 stores (678 in Turkey, 10 in Azerbaijan, and 6 in Georgia as of October 31, 2023). The company primarily adopts an asset-light and scalable approach, emphasizing franchised stores.
To finance the acquisition, JFN intends to employ an existing term-loan facility provided by HSBC, supported by a corporate guarantee issued by Jubilant Foodworks Ltd. Furthermore, a new long-term facility from HSBC, also backed by a corporate guarantee from JFL to HSBC’s favor, will be accessed. JFL will assure the repayment commitments of JFN to HSBC, totaling EUR 60 million, in addition to the existing guarantee of EUR 45.89 million issued by JFL to secure the repayment commitments of the existing term-loan facility.
This strategic maneuver positions Jubilant Foodworks for an enhanced presence in the pizza delivery sector, particularly in Turkey, Azerbaijan, and Georgia, by strengthening its affiliation with DP Eurasia NV.