Domino’s Pizza Group Plc (LON:DOM), which holds the master franchise for US pizza delivery company Domino’s Pizza (NYSE:DPZ) in the UK, Ireland and Germany, said today it had agreed to buy the business of Domino’s Pizza Switzerland AG for a maximum of CHF7m (USD7.3m/EUR5.8m) in cash.
Through the purchase, the company will add 12 more stores, which generate annual sales of CHF12m. The target also plans to open at least 25 further stores over the next five years. According to the group, the Swiss network could be further expanded to reach some 65 outlets.
As part of the agreement, the buyer will initially pay CHF5m on completion and up to CHF2m, depending on the sales performance of the target’s existing stores over a two-year period. The deal also includes a master franchise agreement (MFA), under which the company will get the exclusive right to operate and franchise Domino’s stores in Switzerland, Liechtenstein and Luxembourg as well as an option to acquire the MFA for Austria until the end of 2014.
Domino’s Pizza Group said that the Swiss market offers attractive opportunities due to the current growth of quick service restaurant sector and the country’s predominantly metropolitan-based population. As the brand is not well recognized at present, the buyer intends to take measures to improve product quality and intensify the focus on delivery service and online sales. It also plans to make investments in refurbishing the existing stores or moving some of them to stronger locations.
The company said it expects to incur a short-term loss of CHF750,000 in 2012 as a result of these measures, which, however, will have a positive impact on the Swiss business in 2014.
Completion of the deal is seen in late September and is subject to the seller’s shareholder approval. With the latest purchase, the company will hold the master franchises for seven European countries, out of a total Domino’s global business of 73 international markets.
Depositors in recession hit Spain withdrew EUR74bn from the country’s banks in July, according to figures from the European Central Bank (ECB).
The deposit loss equals 7% of Spain’s GDP in a single month, with the total loss at about 11% in the first seven months of 2012.
The flight of funds from Spain mirrors the situation of Greece, with analysts speculating that the capital is being diverted to German bank accounts and perceived safe havens, such as London property.
Official figures in Spain, released yesterday, show that the country is in a double-dip recession and the region of Catalonia approached Madrid for a EUR5bn rescue package.
Spain’s statistical office said on Tuesday that the country’s economy contracted in the second quarter, with GDP sliding by 1.3% compared to the second quarter of 2011.
US private equity group Clayton, Dubilier & Rice LLC (CD&R) has entered into a definitive agreement that will make it the new owner of David’s Bridal Inc, the US retailer specialising in wedding gowns and related accessories.
Leonard Green & Partners LP, which bought David’s Bridal in 2006, will retain a minority stake in the business. CD&R said that the deal values the target company at about USD1.05bn (EUR842m) and is expected to close during the fourth quarter. Paul Pressler, operating partner at CD&R, will become chairman of David’s Bridal once the purchase is finalised.
David’s Bridal has been in business for more than six decades and currently sells its wares through 300-plus US stores, five outlets in Canada and an online store. In addition to designer bridal gowns, the company also offers special occasion dresses and accessories.
CD&R partner Richard J. Schnall said that David’s Bridal had the advantage of being a unique and strong business operating in a sizeable and stable industry. CD&R looks forward to helping the company solidify its leadership and make the most of its scale by expanding into new segments, channels and geographies, Schnall added.
David’s Bridal president and chief executive Robert D. Huth said that the company was excited to have the CD&R team on board. Their operational expertise will be most welcome as David’s Bridal accelerates its growth strategies, Huth stated.
CD&R, which received legal advice from Debevoise & Plimpton LLP, has secured financing commitments from Bank of America Merrill Lynch, Barclays plc (LON:BARC), Goldman Sachs Bank USA and Morgan Stanley (NYSE:MS). David’s Bridal had Bank of America Merrill Lynch and Barclays as financial advisers, while Latham & Watkins LLP provided it with legal counsel.