Australia’s Dominos’s Pizza Enterprises (DPE) and UK-listed Domino’s Pizza Group plc (DPG) announced on 16 December 2015 that a newly formed joint venture has executed a sale and purchase agreement with the owners of Joey’s Pizza, Carsten Gerlach and Christian Niemax, to acquire the Joey’s Pizza chain of pizza stores in Germany for up to 79 million euro (A$120 million).
Hamburg’s Home Delivery Pizza Chain Is Germany’s Largest
Joey’s Pizza is the largest pizza chain in Germany with 212 stores, comprising 209 franchise stores and three corporate stores. The Joey’s Pizza business is expected to generate system sales of approximately 143 million euro and pro forma, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of approximately 7 million euro for the year ended 31 December 2015.
Acquisition Vital To European Expansion
The acquisition represents a significant expansion in the footprint of DPE’s European operations. Following transaction completion, the store count of DPE in Europe is expected to increase to approximately 775 stores, and will leverage the operational and management expertise of DPE in the Netherlands, Belgium and France as well as facilities in these existing territories. The transaction is subject to regulatory and other customary approvals and is expected to complete in the first quarter of 2016.
Germany – The World’s Fourth Largest Pizza Market
The existing CEO’s of Joey’s Pizza, Friedrich Niemax and Karsten Freigang, have been retained by the JV to assist with conversion of Joey’s Pizza stores to Domino’s Pizza stores. Commenting on the acquisition, Mr Don Meij, DPE’s CEO, said: “Germany is the fourth largest pizza market in the world and our entry into this market represents an exciting long term growth opportunity for DPE. The acquisition of the market leading Joey’s Pizza business provides immediate scale and marketing presence which we can build from. We look forward to partnering with the existing Joey’s Pizza franchisees to leverage the expertise that our regional, and increasingly global, platform provides in terms of our digital offering, procurement and product innovation. We will ensure that our offering reflects the unique tastes of German customers.”
The owners of Joey’s Pizza, Mr Gerlach and Niemax, jointly commented: “We see the benefits which Joey’s Pizza customers and franchisees will obtain from the association with a sophisticated global pizza operator who recognises the importance of our culture and the 27 year history of our business in the German market.”
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