Domino’s Pizza Enterprises will enter the German market by acquiring Joey’s Pizza, a chain of 212 stores in Germany for 79 million euros ($A120 million).
Domino’s will acquire the chain from UK-listed Domino’s Pizza Group Plc, which holds the Domino’s master franchise agreements for the UK, Ireland, Germany and Switzerland.
The acquisition will be made through a joint venture with the UK-listed company, in which Domino’s will hold a two-thirds stake.
Domino’s will initially pay 45 million euros for Joey’s Pizza, with subsequent tiered payments for up to a further 34 million euros.
The deal will help boost Domino’s full year profit and underlying earnings for fiscal 2016 by 30 per cent on the previous year’s results, up from the previous forecast of a 25 per cent rise.
The acquisition comes after Domino’s Pizza Enterprises acquired a chain of 89 pizza stores in France for 35 million euros ($A54.87 million) in October.
Joey’s Pizza is the largest pizza delivery chain in Germany by system sales (143 million euros) and number of stores.
“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,” said Domino’s CEO, Don Meij.
The transaction is subject to regulatory and other customary approvals and is expected to complete in the first quarter of 2016. Entry into the German market brings DPE’s total number of stores to approximately 1870.
The owners of Joey’s Pizza, Karsten Gerlach and Friedrich 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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