FOOD SERVICES | Staff Reporter, UK

Domino's to acquire 44.3% shares in Domino's Iceland for £26.7m

It will take the Company's ownership to 95.3%.

Commenting on the announcement, David Wild, CEO, said, "We're really pleased to be increasing our ownership of Domino's Iceland earlier than was planned. It's a great business and after 18 months of partnership, we have good visibility of its strengths and further opportunities for growth. There is a strong financial and commercial rationale for buying out minorities now rather than waiting for the put or call option to be exercised.

"We've also reviewed our capital structure. It makes sense for a highly cash generative franchise business like DPG to have a balanced approach to equity and debt funding, and this is reflected in our revised target leverage range.

"The additional £20 million share buyback takes the total share purchases announced in the current year to £55 million and underlines our commitment to returning excess capital to shareholders." 

The Acquisition will give DPG increased flexibility in running the business. Certain existing minority shareholder veto rights, including approval for decisions on the timing and implementation of improvements to digital marketing and supply chain, will be removed as a result of the Acquisition.

For the 52 weeks ended 25 December 2016, Domino's Iceland generated on a standalone basis, sales of approximately ISK 5,026 million, and a profit before tax of approximately ISK 340 million (£2.4 million). DPG will finance the Acquisition through existing debt facilities. 

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