Domino’s to take 75% stake in Japanese arm

Domino's Pizza Enterprises (DPE), the Australian-listed pizza company, is planning to take over its Japan-based sister company for more than $135 million.

Domino's Japan is majority owned by Bain Capital Domino Hong Kong.

Domino's, which trades as Domino's Pizza, is an Australian public company that holds the master franchise for Domino's Pizza in Australia, New Zealand, France, Belgium, The Netherlands and Monaco. It runs the largest pizza chain in Australia, and the second largest in New Zealand. It is owned by Domino's Pizza Inc, the NYSE-listed pizza parent.

As per the plan Domino's Pizza Japan's 75-per cent stake will be bought by DPE for ¥12 billion. The purchase, which will be funded via a combination of debt and equity financing, is expected to be completed before the end of September 2013.

With digital delivery strategy already rolling out in Australia and in some European countries, this takeover will help Domino's grow faster than its competitors in tech savvy Japan.

''Japan is a strategic location for DPE's future expansion, providing access to a large market which is well suited to significant new store roll-outs and the relocation of stores to higher traffic locations with improved image and formats'', the Sydney Morning Herald reported Domino's chief executive, Don Meij as saying.

Following the takeover, Domino's shares are in trading halt until Friday. The shares closed at $11.82 on Monday at the Australian Stock Exchange.

Domino's announced a net profit of $28.657 million for the 2012-13 financial year, an increase of more than 6 per cent underlying profit was $30.4 million, an increase of more than 13 per cent on the previous year.

Meij says the roll out of new products contributed to 2012-13 result.

Dominos expects to grow its Japanese network by 40-50 locations per year to around 600 from the current 263-store network.