Thomsons has advised Domino’s Pizza Enterprises Limited (ASX:DMP) on an agreement to acquire 15 stores in New South Wales and the Australian Capital Territory, currently owned by an existing franchisee, in a $13.8 million cash and scrip deal.
The Thomsons team acting on this assignment was led by Partner, Eugene Fung and Special Counsel, Greg Clifton.
The new stores are successful and profitable and are expected to make an immediate positive contribution to Domino’s Pizza Enterprises’ earnings in the current financial year. The acquisition price is based on a multiple of five times adjusted and annualised EBITDA of the new stores, subject to a minimum price of $10 million and maximum of $13.878 million.
The consideration has two components. A cash payment of $10,000,000, funded from existing cash resources and payable on completion and an Earn Out component, conditional on performance over the next 3 financial years, of up to $3,878,000, payable in shares when the FY2015 audited financial results are determined.
As part of the deal, the seller will join the Domino’s Pizza Enterprises leadership team as the Corporate Operations Manager for Australia.
Domino’s Pizza Enterprises holds the exclusive Domino’s master franchise rights for Australia, New Zealand, France, Belgium, the Netherlands and Monaco. It is the largest franchisee for the Domino’s Pizza brand in the world and the largest pizza chain in Australia by store numbers and sales. It has more than 845 stores employing approximately 21,000 people and makes more than 60 million pizzas a year. The Domino’s brand is owned by NYSE-listed Domino’s Pizza, Inc.
The acquisition is subject to shareholder approval of the issue of the Performance Share.