Jubilant Foodworks to Strengthen Domino's Presence with 51.16% Stake in DP Eurasia NV

Jubilant FoodWorks

Nadeesh Kareemdathil, Apoorva Bajj

Dec 5, 2023 — 3 min read

Jubilant Foodworks to Strengthen Domino's Presence with 51.16% Stake in DP Eurasia NV

Jubilant Foodworks Ltd has revealed its intention to acquire an additional 51.16% ownership stake in DP Eurasia NV, which serves as the exclusive master franchisee for the Domino's Pizza brand in Turkey, Azerbaijan, and Georgia.

The acquisition is set to be executed via a subsidiary, with a suggested consideration of up to EUR 73.36 million (approximately Rs 670 crore). Currently holding 48.84% of DP Eurasia's ordinary shares, Jubilant Foodworks Netherlands B.V (JFN), a wholly-owned subsidiary of the company, aims to enhance its stake by acquiring the entire issued and outstanding ordinary share capital of DP Eurasia NV not currently under its ownership. The proposed purchase price is up to 85 pence per share from existing shareholders.

The total consideration for the acquisition is around EUR 73.36 million, constituting an all-cash transaction. DP Eurasia, operating a significant business with 694 stores (678 in Turkey, 10 in Azerbaijan, and 6 in Georgia as of October 31, 2023), primarily follows an asset-light and scalable model through franchised stores.

To fund the acquisition, JFN plans to utilize an existing term-loan facility from HSBC, supported by a corporate guarantee from Jubilant Foodworks Ltd. Additionally, a new long-term facility from HSBC, again backed by a corporate guarantee from Jubilant Foodworks Ltd in favor of HSBC, will be obtained. Jubilant Foodworks Ltd will guarantee JFN's repayment obligations to HSBC, totaling EUR 60 million, in addition to the existing guarantee of EUR 45.89 million issued by Jubilant Foodworks Ltd to secure the repayment obligations of the existing term-loan facility.

DP Eurasia is a publicly listed company on the London Stock Exchange PLC, providing pizza delivery and takeaway-eat-in services through its 694 stores. It is the leading pizza delivery company in Turkey and, in addition to its pizza business, operates the COFFY coffee brand with 67 stores, 78% of which are franchised.

Jubilant FoodWorks Ltd, India’s largest food service company, aims to leverage its experience to support DP Eurasia's growth plans. The proposed acquisition positions JFN to benefit from a greater share of future value upside.

Jubilant FoodWorks Ltd proposes to acquire ordinary shares of DP Eurasia for up to 85 pence (equivalent to €0.97 as of November 27), representing a premium of about 24.1% to the closing share price of 68.5 pence per DP Eurasia share on November 27. Jubilant FoodWorks Ltd holds exclusive master franchise rights for the Domino’s Pizza brand in India, Sri Lanka, Bangladesh, and Nepal. Additionally, it has exclusive rights to develop and operate Dunkin’ restaurants in India and Popeyes restaurants in India, Bangladesh, Nepal, and Bhutan.

This strategic move positions Jubilant Foodworks for an expanded presence in the pizza delivery sector, especially in Turkey, Azerbaijan, and Georgia, through its strengthened association with DP Eurasia NV.

During the initial half of 2023, DP Eurasia recorded a revenue of 1,581 million Turkish lira and an adjusted net income of 229 million Turkish lira.

Established in 1995, Jubilant FoodWorks Limited stands as India’s largest food service company and is a constituent of the Jubilant Bhartia Group. Holding the exclusive master franchise rights granted by Domino’s Pizza Inc., the company is authorized to develop and operate the Domino’s Pizza brand in India, Sri Lanka, Bangladesh, and Nepal.

Recent reports earlier this year indicated Jubilant FoodWorks' preparations to introduce Domino’s Pizza on the government’s Open Network for Digital Commerce (ONDC) platform.