Germany’s largest pizza chain, Joey’s Pizza, is being bought jointly by the owners of Domino’s Pizza in Australia and the UK.
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Subsequent payments are capped at €34m depending on certain conditions, Domino’s Pizza said.
The transaction will have a small positive impact on Domino’s underlying 2016 forecast earnings per share because the contribution will only be for part of the year.
The London-listed company has more than 800 stores in the United Kingdom, and holds franchises in Ireland, Germany and Switzerland.
Domino’s Pizza will pay DPG up to €25m for the latter to transfer its access rights to the German market and the existing franchise system to the joint venture.
“This acquisition of the market-leading Joey’s Pizza business provides immediate scale and marketing presence which we can build from”, he said. The acquisition is the Aussie company’s largest in Europe, and comes follows a 35 million euro deal to acquire 89 Pizza Sprint stores in France, in October. Joey’s is predicted to rack up sales of about €143m (£103m) in 2015, and underlying earnings before interest, tax, depreciation and amortisation of roughly €7m. The group’s European operations also include stores in Belgium, the Netherlands, and Monaco.
Following the deal, the joint venture – Domino’s Pizza will own a third and DPE two-thirds – will oversee around 227 outlets across Germany.
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The owners of Joey’s Pizza, Carsten Gerlach and Christian Niemax, added: “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”.
