Domino’s Buys Japan Sister Company

Domino’s Pizza Enterprises (DPE) is preparing to take over its sister company, which is based in Japan, and will shell out over $235 million to save the company.

The Australian pizza chain has entered into an agreement with Domino’s Pizza Japan, under the Bain Capital Domino Hong Kong company for 12 Billion Yen. DPE is going to take 75% of the company’s stake and will provide about 9 Billion Yen as its new debt fund.

This agreement came at a time when DPE’s profits for the current financial year has increased by 6% compared to the previous year. The company announced it had a net profit of $28.657 million, with an underlying profit of $30.4 million.

The growth and increase can be attributed to Domino’s new products, with the Chef’s Best range. It was the biggest product launch the company has undertaken in the last 20 years.

Shares for DPE however, where halted last Friday, because of the news of the takeover. The shares sold at $11.82 when it last closed.

DPE’s chief said that the move will help its Japan operations expand and take more opportunities.

“The acquisition represents an exciting opportunity to leverage our proven track record of successfully growing the Domino’s network to deliver shareholder value.”

“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.”

Domino’s is expecting to improve earnings to as much as 15% by the next financial year, especially with around 80 stores opening all over the world.